Fingers are being pointed at the Stock Exchange of Thailand (SET).

If the big-lot transactions for 329 million shares did not appear on the big-lot board on the day that the transactions were notified to the SEC, it is the SET’s duty to investigate, said Chalee Chanthanaying-yong, the SEC’s senior assistant secretary-general.

Usually, whenever there is such a transaction on the market, it is publicised through the market on the same day, he said.

The SEC was notified on January 20 that Ample Rich had sold 329 million shares or 10.97 per cent of Shin to Thaksin’s children. On January 23, both Panthongtae and Pinthongta reported the sale of all their shares to Cedar Holdings and Aspen Holdings, representing Singa-pore’s Temasek Holdings. The Ample Rich transaction was publicised after the deal was done.

The Ample Rich transaction has led to questions of whether Pin-thongta and Panthongtae exercised inside information in striking the deal with Ample Rich, three days before the Temasek Holdings-Shin Corp deal was announced. Two weeks before the deal was done, Panthongtae insisted that he did not know of the deal.

The Ample Rich transaction price is not available, but some newspapers claim it was Bt1 per share.

The issue has strengthened public speculation about the prime minister’s ethics. Thaksin admitted earlier that Ample Rich is among his assets.

“The Ample Rich and Temasek-Shin transactions are legal, but they’re another episode that shows the seller’s efforts to make use of legal loopholes,” said an investment banker. If Ample Rich sold the shares directly to Temasek, it might have been more acceptable.

Democrat MP Korn Chatikavanij, a former investment banker, said that if Ample Rich had sold the shares directly to Temasek, the Shinawatra family would have had problems bringing the proceeds into Thailand. Ample Rich, registered in the British Virgin Islands, didn’t have to pay any tax if it sold the shares directly to Temasek, so tax wasn’t an issue. Selling the shares to Panthongtae and Pinthongta at Bt1 meant the family had to leave only Bt329 million outside the country. The Shinawatra children both sold the shares at Bt49.25 each and all the profits are in Thailand.

It means the family sees more investment opportunities here than overseas, he said, adding that one question remained: How could Thaksin have channelled money out of the country to finance Ample Rich’s investment in Shin in the first place?

The opposition has undertaken to pressure the Finance Ministry to clarify the tax issues regarding the transfer of shares from Thaksin’s wife Pojaman to her brother, Bhanapot Damapong.

Bhanapot received 31.32 million shares in Shin without paying tax, on the grounds that they were given to him as a gift (thamjarnya). Senator Chirmsak Pinthong has calculated that Bhanapot should have paid Bt4.729 billion in tax, as of September 30, 2005, to the Revenue Department.

Korn also said there is talk that in 2000, when Thaksin transferred a portion of Shin shares to Pinthongta as a gift, he actually sold another portion to Panthongtae at Bt1 a share. Without money, Panthongtae borrowed Bt9 billion from his mother and pledged the share certificates for the loan.

“If this is true, there should be a revision [in the revenue code]. [It should be considered whether] selling shares below market price should be subjected to taxation and [whether] the tax should be calculated from the market price, in the same way that taxation is applied to land transactions,” he said. “When you sell land, no matter what price you get, you have to pay tax based on the evaluation price.”

Korn also raised questions about the SEC’s waiver of the need for Temasek to tender for shares in two listed Shin subsidiaries, Shin Satellite Plc (Sattel) and iTV Plc. Under the chain principle rule, when buying a listed company which owns more than 25 per cent in other listed companies, the buyer must tender for the remaining shares in all the companies.

Temasek, he said, also made a conflicting move. While telling the SEC that Sattel and iTV are immaterial assets, Temasek’s representative, S Iswaran, said on January 23 that Temasek has no plan to divest Shin’s stakes in the two companies.

Obviously, without the tender offer, minor shareholders of Sattel and iTV are not eligible to the same rights given to Shin shareholders, he said.

He also pointed out that Temasek does not intend to buy AIS shares, because the tender price it is quoting, Bt72.31, is too low to attract sellers, when compared to the market price of more than Bt100.

“If the tender price were based on the market price, Shin’s share price would have been Bt35,” he said. As Shin shares are being sold at Bt49.25, there is a need to adjust down the price of AIS, he said.

The opposition also questioned Thaksin’s morality in coming up with complicated deals involving the establishment of a number of nominees to ensure that Shin’s foreign ownership does not exceed the statutory limit of 49 per cent.

“As the prime minister, if you think that the [alien business] law is appropriate, why do you have to be so evasive? If you think the law is unfair, why not propose legal amendments to legalise a higher foreign ownership limit?” Korn asked.

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