Just saw this in another forum,haiz Temasek made paper lost of
820 million in a matter of half a year? Or prehaps even real lost
should they proceed to sell of a portion of the shares next year to
get in line with regulations.
Shin Corp losses hit Temasek after coup
By John Burton in Singapore
Published: September 22 2006 12:51 | Last updated: September 22
2006 12:51
Temasek Holdings, the Singapore state investment company, on Friday
faced the threat of further losses on its $1.9bn investment in Shin
Corp, which it bought in January from the family of Thaksin
Shinawatra, the Thai prime minister who was overthrown in a coup
this week.
For a second day in a row, the share price of Shin Corp and its
affiliates fell sharply as the Bangkok stock market reacted to
reports that the new Thai government would launch a probe into
alleged corruption involving Mr Thaksin and his family, including
the tax-free sale of Shin Corp.
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Shin Corp's share price has fallen 43 per cent since January,
resulting in a paper loss of nearly $820m on Temasek's 49 per cent
stake in Shin Corp, a telecoms and media group.
Regulators have focused on whether Temasek breached a 49 per cent
limit on foreign holdings in strategic industries. A consortium led
by Temasek acquired 96 per cent of Shin Corp in March after
Temaseks initial investment triggered a mandatory offer for the
remaining stakes.
Regulators are investigating whether some of the consortium
companies served as proxies for Temasek to gain control of Shin
Corp. Temasek said it complied fully with Thai law. Other foreign
companies have been suspected of using similar methods to take over
Thai companies.
The Thai commerce ministry said it might forward the results of its
investigation to the police.
Most analysts believe that it is unlikely that Thailand will
nullify Temasek's takeover of Shin Corp, but Temasek could be
forced to sell excess shares at a potential loss if it is found to
be in breach in the foreign shareholding limits.
"There is the potential for a backlash against Temasek, although
the Thais are a pragmatic people. Going after Temasek could harm
the climate for other foreign investors in Thailand," said Hugh
Young, head of Aberdeen Asset Management in Asia. He also predicted
a period of uncertainty ahead for Shin Corp.
The Temasek-led consortium also could suffer potential losses if it
proceeds with a plan to sell at least 11.3 per cent of its stake in
Shin Corp next year to retain the group's listing status by
increasing its free-float to 15 per cent as required by Bangkok
stock exchange rules.
Advanced Info Services, Thailand's biggest mobile operator and Shin
Corp's main asset, has suffered less in the recent market slide
than its parent. Temasek-owned Singapore Telecommunications also
has a 21 per cent stake in AIS.
Copyright The Financial Times Limited 2006
