CNOOC's US$18.5-billion (Bt693-billion) bid for Unocal in June 2005 was more attractive than that of Chevron, another US energy giant. Despite offering greater financial benefit to Unocal stockholders, the Chinese bid faced hurdles from the outset - the most significant of which was the US House of Representatives' resolution deeming the takeover attempt a threat to US national security, thus requiring the Bush administration to conduct

a thorough review.

By the year's end, state-owned CNOOC had withdrawn its bid because of mounting pressure. Unocal was eventually acquired by Chevron.

Here in Thailand, the judiciary will soon conduct a review of the controversial Bt73-billion sale of Shin Corp to Temasek Holdings of Singapore by the Shinawatra family in January.

The review is focused on the validity of state licences granted to iTV, Shin Satellite and AIS, all of which are units of Shin Corp.

The Thai Supreme Administrative Court approved an appeal for its lower court to conduct a trial of this case on September 12 - a week before Army chief General Sondhi Boonyaratglin staged a coup d'etat to oust Thaksin Shinawatra from the premiership.

The trial will focus on alleged dereliction of duty by officials regarding the state concessions and licences granted to these companies.

The court is empowered to seek documents and other evidence from all state agencies as well as to ask witnesses to take the stand. Among the agencies likely to be involved are the Department of Business Development, as the registrar of companies; the Council of State, which deliberates laws on behalf of the executive branch; and the Securities and Exchange Commission, which regulates the capital market, on which shares of these firms were publicly traded.

The upcoming judicial review is expected to clear doubts once and for all as to whether national interests were really threatened by the transaction and, if so, what remedies should be enforced.

Some legal pundits have even pointed out that there are legitimate grounds for the court to order the nationalisation of these assets, because the transaction violated several Thai laws. However, other analysts believe that softer remedies are more likely, since tough action could hurt the investment climate and wreak havoc on the economy.

And considering that there are more than 17 million users of AIS' mobile-phone service, that Shin Sat is one of Asia's largest satellite service providers and that iTV is one of the major TV stations in Thailand, it's of paramount importance to ensure that any court action does not disrupt the day-to-day operations of these businesses.

In response to the growing domestic opposition to its massive shareholding in Shin Corp - which now stands at about 96 per cent when one includes nominees and other indirect holdings - the management of Temasek Holdings has reportedly offered to reduce its direct and indirect stakes to within the legal limit of 49 per cent. One option it might consider is to make a public offering for Thai investors to buy back the shares.

Nophakhun Limsamarnphun

 nop1122@yahoo.com