Bangkok – Shares of telecom firms in Thailand tumbled on Tuesday as last week’s court ruling against ousted prime minister Thaksin Shinawatra spooked investors.
Telecom stocks fell on worries that state agencies would take legal action to recover revenue allegedly ‘lost’ under the terms of concessions granted under the Thaksin administration.
Separately, the National Anti-Corruption Commission met to consider taking further legal action against Thaksin for what Prime Minister Abhisit Vejjajiva called “damage to the state” arising from policy decisions which the court ruled had favoured his family’s company, Shin Corp.
The Supreme Court last Friday ordered the state to seize 46 billion baht (US$1.4 billion) of Thaksin’s frozen assets. In the process, it opened a legal Pandora’s box because it concluded that Thaksin had manipulated policies to benefit Shin Corp, which was controlled by his family at the time. In January 2006, the company was sold to Singapore’s Temasek Holdings, which has 41.7 per cent ownership.
The ruling in effect called into question the terms of concessions under which Shin Corp companies operated. On Tuesday, Shin Corp shares fell 3.5 per cent to 28 baht, its steepest decline since October, amid panic selling.
Shin Corp-controlled AIS, the country’s largest mobile operator, fell 4.3 per cent to 84.25 baht, while Thaicom Pcl, a satellite monopoly, shed 11 per cent to 5.4 baht.
Shares of other telecom companies operating in Thailand, DTAC and True Move, were not spared, although the stock market had remained closed for three days after the Friday’s ruling. The stock market was closed on Monday for a public holiday.
Analysts said worries about telecom shares would persist until the government’s intentions were made clear – and also warned that the cases could take years to resolve.
Mr Abhisit has told state agencies to pursue cases exposed by last Friday’s ruling to level the playing field in the telecom sector. Thaksin’s policy decisions are said to have cost the state upwards of 138 billion baht.
Industry executives have said that voiding contracts could unravel the increasingly interlocked web of telecom providers, throwing old contracts back to renegotiation, and possibly threatening the viability of some companies.
Citigroup Global Markets said in a statement that the “government will be under public pressure” to pursue the cases.
An investment banker warned that “retroactive changes” would scare off long-term large foreign investors, and several analysts said it may not be in the government’s interest to “go after” the companies.
Shin Corp, AIS and Thaicom have said that they had operated “with good faith in compliance with laws”.
Nirmal Ghosh in Bangkok – The Straits Times (Asia News Network)
Bangkok 7th World Most connected city to China
Bangkok also ranks 3rd in terms of the volume of Chinese corporate leasing activity over the last three years, according to a new report from real estate consulting firm JLL.
While China’s biggest corporates are increasingly flexing their global muscle as the country’s economic and geopolitical influence accelerates, Bangkok is the 10th most popular destination for mainland firms expanding overseas. (more…)
Thailand’s Special Economic Zones (SEZ) and new opportunity connected
The SEZ policy was first launched in 2015 based on the government’s belief in the strong potential of the 10 areas to connect with the neighboring countries in terms of trade, economy and investment
With its strategic location in the center of ASEAN with emerging markets, including Cambodia, Laos, Myanmar, Malaysia and southern China, on its border, Thailand is well position to connect investors to new opportunities arising from the increasing border trade and the region’s rapid economic growth.
Can border reopening revive tourism in South-East Asia?
In Thailand, where pre-pandemic tourism accounted for 11-12% of GDP, the country lost an estimated $50bn last year as Covid-19...
Thailand dropped from UK’s tough covid-19 travel ‘red list’
Earlier, Thailand was listed among countries with high infection levels that were put on a ‘red list’, requiring arrivals to...
The ASEAN-Russia Trade and Investment Cooperation Work Program
ASEAN and Russia recently agreed to enhance and widen economic cooperation at the 10th ASEAN Economic Ministers (AEM)-Russia Consultations held...
Flexible Workspace Startup Worklounge Debuts with 20+ Luxury Member Lounges in Thailand
Worklounge launches a premium membership granting remote professionals and executives access to exclusive hotel lounges across Thailand. Their platform is...
5 insights to guide ASEAN’s digital generation in a post-pandemic world
We surveyed 86,000 people from six ASEAN countries about their views for a post-pandemic world. The ASEAN Digital Generation Report...