The Central Administrative Court yesterday agreed to proceed with a petition against the National Telecommunications Commission (NTC), the Office of the NTC and the Information and Communications Technology  Ministry for negligence in failing to safeguard national interests in the ownership of Shin Satellite (ShinSat).

The court's decision could add spice to the vast controversy surrounding the takeover of Shin Corp, the parent company of ShinSat, by Singapore's investment arm, Temasek Holdings. The deal, seen by many as the beginning of the end for the Thaksin Shinawatra administration, has already led to an investigation into whether Temasek breached any laws in the takeover, while the children of former prime minister Thaksin are being forced to pay back taxes amounting to more than Bt20 billion.

The petition was filed by Supongse Limtanakul, deputy rector of Bangkok University. He says that as a Thai citizen, he has suffered from the negligence or delayed action of the three organisations.

In his petition, Supongse said the defendants neglected to supervise the Thaicom satellites owned by ShinSat. It was a Thai company, and its satellites belonged to all Thais under a name bestowed by His Majesty the King.

However, after January 23, 2006, when the Shinawatra family sold its majority stake in Shin - which owns 41.34 per cent of ShinSat - to Singapore's Temasek Holdings, the takeover resulted in the transfer of ownership of the satellites.

The Thaicom satellites have become vulnerable to spies seeking information that could jeopardise national security, which is a felony under laws governing government secrets.

NTC chairman Choochart Phromprasid yesterday said he would ask the NTC's legal office to look into the matter. Meanwhile, the commission is awaiting the court's call to explain the case.

ICT Minister Sitthichai Pookaiyaudom said he was also awaiting the court's order for an explanation.

"Actually, this did not involve me, as [this incident] took place before I took up this position," he said.

When the transaction took place, Sora-at Klinpratoom was the ICT minister.

The court's decision to proceed with the petition came on the same day that Dow Jones Newswires quoted Sitthichai as saying that the government did not want Temasek to be prosecuted, even if it broke Thailand's foreign-ownership laws when it bought a stake in Shin last year.

Sitthichai's comments indicate that the divisive deal, which strained relations between the two countries, will be resolved in a way that preserves Thailand's foreign-investment reputation and keeps one of Temasek's biggest investments in the region largely intact.

"I'm not a prosecutor, but I don't want to upset the entire telecom sector, and this is also the view of the prime minister," the minister, who is responsible for the Kingdom's telecommunications, told Dow Jones Newswires in an interview yesterday.

"Temasek must find a way to bring its shareholding to a level that is in line with the law, but the government won't pursue legal action on its part and Shin won't lose its [telecom] concession," Sitthichai said.

A source close to the case said Temasek would soon unload some of its shares in Shin to another investor, in order to soften public criticism. The comment coincided with Shin's attempt to increase the free floats - the ratio of shares in the hands of minor shareholders - to 15 per cent, thus avoiding delisting from the Stock Exchange of Thailand.

"We expect that the investor buying the stake from Temasek will be Surin Upatkoon," the source said.

Surin first appeared on the scene shortly after reports that Kularb Kaew, one of a group of companies that took over Shin, could be a Temasek nominee. In March 2006, the Malaysian-based Thai tycoon invested more than Bt2 billion to acquire 68 per cent of Kularb Kaew, in an apparent bid to clear Kularb Kaew in any nominee investigation.

Surin has vowed all along that he is no one's nominee. However, the investigation into the nominee issue by the Department of Special Investigation (DSI) continues.

Sitthichai said the DSI expected to make a ruling about the middle of this month.

"The ruling will probably say Kularb Kaew was indeed a Temasek nominee, so Temasek must act accordingly and cut its share in Shin," Sitthichai said. "I hope Thais will accept this settlement."

A senior government official close to Prime Minister Surayud Chulanont said there had been debate among the Cabinet ministers about how to deal with Temasek.

"Initially, nationalistic feelings pushed many [of them] to back tough action against Temasek," the official told Dow Jones Newswires on condition of anonymity.

"But if we used the nominee issue in this case, then we would have to use it in many other cases as well, and this would seriously damage foreign investors' confidence in Thailand. So the prime minister opted for less-drastic measures," the official said.