The deal by Prime Minister Thaksin Shinawatra’s family was an example of flawed morality, a potential threat to national security, and could damage bilateral relations with Singapore, the symposium heard.

The controversial takeover, which saw Thaksin’s family utilise legal loopholes to avoid paying tax, had caused “extensive permanent damage”, Thailand Development Research Institute (TDRI) director Somkiat Tankitvanij told the forum.

First, Somkiat said, the deal had set a new standard whereby foreign investors could now gain more than 50 per cent ownership of Thai firms through local nominees. This could have long-term, lasting affects on domestic media and real estate businesses plus the fishing sector, which have traditionally imposed a limit on foreign ownership.

“Tax morale has also been hurt gravely,” Somkiat went on. “People have less trust in the government’s [ability to collect taxes] so they will try to pay less tax.”

Third, the credibility of the Stock Exchange of Thailand had been damaged, he said.

The deal also endorsed the notion that rich people could do anything and still deserve respect from the rest of society without regard about how their wealth was obtained.

Somkiat said that, in reality, Temasek, an investment arm of the Singapore government, now controls more than 85 per cent of Shin despite Thai law banning foreigners from holding more than 49 per cent in key businesses that affect national security.

Since Shin had received special financial support from the Board of Investment, which is funded by taxpayers, the public should ask if a foreign government should own such sensitive businesses.

“We should ask if we should not take it back,” Somkiat said, adding that debate about national interest was now irrelevant for the Thaksin administration.

Thitinand Ponsuthirak, a lecturer of international relations at Chulalongkorn University, warned that the deal would eventually backfire on the Singaporean government, especially when the deal had been set up to allow the prime minister’s family to avoid paying a huge sum in tax.

Indeed, the backlash against Singapore has already begun. Dej-udom Krairith, of the Law Society of Thailand, criticised the island republic. “Thai people’s right to privacy may have been violated,” he said, referring to the fact that Shin, which owns AIS, the Kingdom’s biggest mobile-phone service provider, has 15 million customers in Thailand.

“In effect, many Thai people’s right to privacy now depends on the mercy of the biggest shareholders [of Shin Corp]. But do you think Thais can rely on the mercy of the Singaporean government?”

Prasong Lert-rattanawisut, deputy managing editor of Matichon daily and an old hand in digging into Thaksin’s business dealings, said the premier had a history of deception and manipulation of his wealth and stocks.

“I’ve been talking about the issue of tax evasion for five years,” he said.

Pravit Rojanaphruk
The Nation