Norwegian telecom giant Telenor says it is uncomfortable with the Commerce Ministry's decision to broaden the nominee investigation to include its Thai affiliates, saying the move will have negative repercussions for the entire telecom industry.

However, Telenor's representative, Sigve Brekke, who is chief executive of United Communication Industry (Ucom), yesterday said the Ucom group was ready to cooperate with the probe, insisting that the process in which Ucom was taken over fully complied with relevant Thai laws.

He said that from the perspective of the industry and foreign investors, it was not good for Thailand that these issues are going on too long and he hoped they would soon be settled.

The planned investigation will have no affect on the plans of Ucom's cellular operator, Total Access Communication (DTAC), to enter the Internet calling market and launch an overseas calling service through its newly founded subsidiary, DTAC Network, Brekke said.

The Commerce Ministry's investigative committee has expanded its investigation of companies suspected of acting as nominees for foreign investors to cover 16 more firms. Originally, the probe covered Kularb Kaew, Cedar Holdings, Aspen Holdings and Cypress Holdings, all of which are directly or indirectly involved with Singapore's Temasek Holdings.

The new list includes Ucom's major shareholder, Thai Telco Holdings, and Ucom itself.

"If it wants to investigate, we've nothing to hide, so we will answer any questions it may have," Brekke said of the committee's plans. The companies have not yet been summoned to give evidence.

Telenor's vice president for corporate communications, Esben Tuman, told The Nation last week that Telenor conducted all its operations on a long-term basis and complied with prevailing conditions and regulations.

He said Telenor, which has ownership interests in 13 mobile operators across Europe and Asia, had never faced a similar case in other markets.

Telenor became the strategic partner of Ucom and DTAC in 2000, by acquiring a 24.8-per-cent share of Ucom and a 30-per-cent share of DTAC through its subsidiary, Telenor Asia.

In a complex set of transactions last year it gained a bigger stake in its local partners. Thai Telco Holdings, Telenor Asia's 49-per-cent-owned affiliate, bought a 39.9-per-cent stake in Ucom in a deal worth Bt9.2 billion.

As of June this year, Thai Telco owns 42.4 per cent of Ucom, while Telenor Asia holds 47 per cent. Ucom owns a 41.6-per-cent stake in DTAC, while Telenor Asia owns 32.9 per cent. Foreign shareholdings in telecom companies are limited by law to 49 per cent.

If defined as a nominee, Ucom could be ordered to cut its relationship with its shareholders and such a ruling could also affect new telecom licences.

Brekke said DTAC Network had already been awarded an Internet licence by the National Telecommunications Commission and is waiting for the commission to grant it a licence to operate an overseas-call gateway service.

DTAC Network, which has registered capital of Bt1 million, plans to use the Internet licence to develop a Voice over Internet Protocol service, and is developing a business model of the overseas-call gateway service.

Brekke said that DTAC, which is listed on the Singapore stock exchange, remained firm in its dual-listing plan to list on the Stock Exchange of Thailand before the end of the year.

"There is no obstacle at all. We may list after the general election, when the political situation is expected to have improved," he said.

The ministry's decision to extend the scope of the nominee investigation has raised suspicions among politicians and observers that it intends to cover up the nominee issue for the benefit of caretaker Prime Minister Thaksin Shinawatra, whose family reaped huge profits from the sale of its stake in Shin Corp to Singapore's Temasek. Although the ministry insists that it is seeking fairness, its decision has brought negative criticism.

Anti-Thaksin activist Vuthiphong Priebjrivat delivered a letter to Siam Commercial Bank chairman Vichit Surapongchai yesterday, asking him to clarify the bank's position in Kularb Kaew, "to show its responsibility to society".

Vuthiphong said the bank, which provided financial support to Temasek Holdings when it took over Shin Corp Plc early this year, should publicly clear itself and prove it practises good corporate governance.

"If Vichit believes the bank did it right, the bank should make a clear announcement to the public and let society know," he said.

Vuthiphong, who is a key player in the network of Thaksin protesters, said that, based on the money trail, the network believed the SCB lacks good governance..

"The bank focused mainly on benefits and it lacks corporate social responsibility," he said, adding that as Thailand's oldest bank, SCB should be a model to Thai business, particularly in the area of good governance.

The SCB became a subject of the Commerce Ministry's nominee investigation as a shareholder of Cedar Holdings, which holds a 51-per-cent stake in Shin Corp. SCB's representative testified to the investigative committee on Monday.

SCB's executive vice president for corporate communication, Ongorn Abhakorn na Ayuthaya, said the bank would wait for the Commerce Ministry's conclusions from the Kularb Kaew examination before making any reaction.

The ministry has not set a clear date for completion of the investigation.

However, Vuthiphong said he was confident there has been political interference in the investigation, and the network will move against other companies suspected of having relationships with caretaker Prime Minister Thaksin Shinawatra.

Usanee Mongkolporn,

Somruedi Banchongduang

The Nation