BANGKOK - When the family of Thai Prime
Minister Thaksin Shinawatra sold off their stake
in giant telecommunications company Shin Corp for
73.3 billion baht (US$1.85 billion), one of the
reasons cited was to take the political heat out
of accusations leveled at the premier of conflict
of interest.
But far from silencing his
critics, the sale has triggered a veritable
storm
that has added considerably to the voices calling
for Thaksin to resign.
In the first major
public indication of dissatisfaction within
Thaksin's ruling Thai Rak Thai party, Minister of
Culture Uraiwan Thienthong resigned on Friday.
"The political situation is not good at the
moment, and as the minister of culture I have to
uphold the ethics of good governance," Uraiwan
told a news conference.
The resignation,
which was unexpected, came ahead of a large
anti-government rally to be held in the capital
Bangkok on Saturday led by Sondhi Limthongkul, a
media baron who is one of Thaksin's most outspoken
critics.
Sondhi, who accuses Thaksin's
government of corruption and abusing its powers,
received a fillip on Thursday when the Central
Administrative Court ordered state-run CAT Telecom
to stop blocking the signal used to broadcast
Sondhi's satellite talk show, which has become the
focal point of his campaign against Thaksin. The
court's decision followed a petition filed by
Sondhi, host of the Thailand Weekly talk
show.
But back to Thaksin's problems.
In a mark of escalating dissatisfaction
with the government, more than 200 academics from
nine universities have signed an open letter
condemning Thaksin's leadership and criticizing
his exploitation of legal loopholes that allowed
his family to sell Shin Corp's shares tax-free.
And Kaewsan Atiphoti, a Bangkok senator
and drafter of the constitution, was due on Friday
to deliver a letter to the House Speaker calling
for Thaksin's impeachment. At this point such a
move would fail, given Thai Rak Thai's domination
of both houses of parliament, but after the
resignation of the culture minister, further
defections cannot be ruled out.
Saturday's
protest, which is expected to attract hundreds of
thousands of people with different axes to grind -
from disgruntled teachers to human-rights
activists - will culminate in a group led by
Sondhi filing a royal petition with His Majesty
King Bhumibol Adulyadej through General Prem
Tinsulanonda, chief of the privy councilors and
statesman. The petition will ask His Majesty to
replace Thaksin with a "respected and qualified
figure".
For his part, Thaksin has brushed
aside calls for him to step down. "Not in this
lifetime will you see me resign. Everything will
proceed according to the rules and regulations of
this country," he said tersely at a Government
House briefing. On another occasion he urged
people to "calm down".
Just weeks ago the
likelihood of Thaksin, into the second year of his
second four-year term, resigning was indeed
remote. But then came the fateful Shin Corp sale.
The market had been awash with talk of the
Shinawatras divesting, and on January 21 the deal
was finally concluded: Temasek Holdings, the
investment arm of the Singaporean government, paid
$1.85 billion to buy a 49.6% stake in Shin Corp
from Thaksin's children and other family members.
The deal was the biggest in Thai history,
and immediately set off an outcry. While some
complained of foreigners getting their hands on
the country's assets and posing a security risk,
others focused on the deal itself.
Initially the bone of contention was that
the deal was tax-free. Then allegations of insider
trading and even breaking the law were leveled.
On January 20, Ample Rich, a holding
vehicle established by Thaksin and registered in
the British Virgin Islands, sold 164.6 million
shares in Shin Corp to two Shinawatra siblings for
at-par value of 1 baht per share. The next working
day, Panthongtae and Pinthongta Shinawatra both
sold these Shin shares to Temasek Holdings for
49.25 baht each as part of the buyout of the 49.6%
stake in Shin from the Shinawatra and Damapong
families.
The main sale to Temasek was
tax-free under a waiver on capital gains for
transactions on the Stock Exchange of Thailand
(SET), but it is not clear whether the Ample Rich
transactions should have been exempt from taxes.
Officials from the Revenue Department, the
Finance Ministry, the SET and the Securities and
Exchange Commission have held briefings to explain
the regulatory issues involved, but without
settling all doubts. In fact they just added to
the confusion.
The Shinawatra children
have also been accused of insider trading and
disclosure violations related to their Shin
shareholdings held through Ample Rich. These
issues also have not been explained to everyone's
satisfaction.
Billionaire - and that's
dollars - Thaksin rose to power and swept into his
second term on the back of his hands-on chief
executive officer-style of governance, and his
populist "Thaksinomics" policies. But growing
numbers of people have become disenchanted with
the premier's style, which to many borders on
arrogance.
"In this [Shin sale] case,
perception matters more than the substance,"
Thitinan Pongsudhirak, a political scientist at
Chulalongkorn University, was quoted in the
Bangkok newspaper ThaiDay as saying. "What
disturbs people the most is the way Thaksin has
gone about it [the deal]. It was the way he was
almost gloating ... It's the gloating and the
double standards."
Thaksin is by no means
down. But his family's billion-dollar deal could
prove to be the catalyst leading to his downfall.
Tony Allison is a Thailand-based
correspondent.
(Copyright 2006 Asia
Times Online Ltd. All rights reserved. Please
contact us for information on sales, syndication and republishing
.)
