[Kabar-indonesia] Investors in Asian firms watching probe into Thai deal that set off coup [+AT]

[Joyo at aol.com]

also: AT: The democratic way to prosecute Thaksin [By Shawn W Crispin]

Investors in Asian companies watching probe into Thai deal that set off coup

By TANALEE SMITH
Associated Press Writer

SINGAPORE, October 11 (AP) - Asian companies and foreign investors are
certain to be closely watching the economic fallout of the business
deal that brought down the Thai government.

In a thriving region eager for foreign investment, the financial
market reaction to the Sept. 19 bloodless military coup was relatively
subdued after some initial jitters, a sign that Asia is less
vulnerable financially than it was 10 years ago. But observers wonder
whether the fact that a key trigger was a deal that gave controlling
interest in a national telecom to a foreign company could cause some
investors to think twice.

"Even in this more globalized era, people are still sensitive when a
national utility is sold to foreign investors. I don't think there's
any escaping that," said Dave Cohen, an analyst with Action Economics
in Singapore. "The repercussions in Thailand are a reminder that these
risks have always been there in the background. But that's been
balanced by the ongoing superior growth that's been registered by the
emerging Asian economies."

In January, Temasek Holdings -- the investment arm of the Singapore
government -- purchased a controlling stake in Thailand's main telecom
company, Shin Corp., from the family of then-Prime Minister Thaksin
Shinawatra.

Thaksin was already a divisive figure facing a political crisis. His
critics accused him of using his status to enrich himself and his
associates, interfering with independent state bodies and insulting
the country's revered monarchy.

The announcement of the sale caused immediate protests, with
pro-democracy activists making several marches to the Singapore
Embassy, carrying Thai flags and shouting "Singapore, go home!" in
February.

The protesters were outraged by two things: the fact that Thaksin did
not pay taxes on the sale and that the country's biggest telecom
enterprise was sold to a foreign power. The political fallout
snowballed until Thaksin was ousted while he was in New York attending
the United Nations General Assembly.

The legality of Temasek deal is now being investigated in Thai courts
-- and the business world is watching.

"Countries that may be a bit wary about the potential backlash of a
foreign investor may think twice," said Song Seng Wun, an economist
with Singapore's GK Goh Research Pte. Ltd.

It is unlikely that the risk potential on both sides will dampen, Song
said, but Temasek and companies like it will also likely be more
cautious.

"It will not make a huge difference in their risk appetite, but they
need to take more care when investing in countries or sectors where
there's a higher level of interaction between government officials and
the private business community," he said.

The furor over the $1.9 billion Shin Corp. purchase undoubtedly came
as a surprise to Temasek, which in recent years has focused on
increasing its Asian profile through investments in leading or
emerging regional companies. Its overall portfolio of $81.1 billion
includes Singapore Telecommunications, which bought out Australian
cellular operator Optus in 2001, and Singapore Airlines, which owns 49
percent of Virgin Atlantic.

Asian partnerships -- in China, India, Indonesia, and other countries
-- make up 34 percent of the portfolio of the government-owned
company.

"Temasek's advantage is that it operates in a region where it has
great familiarity with the countries," Cohen said. "They would be
obliged to tolerate the political uncertainties that would be there in
any deal. They have to invest in the real world."

Last week, Thailand's Supreme Administrative Court accepted a lawsuit
seeking to cancel licenses given to Shin Corp., alleging it is no
longer entitled to hold the licenses because the company's sale
violated provisions of Thai law.

Under Thai investment laws, a foreign company can't own more than 49
percent of a Thai company. The investigation is probing whether
Temasek controls as much as 96 percent of Shin Corp. through holding
companies linked to it.

Temasek officials declined to be interviewed for this story. Last
week, company officials said Temasek complied with Thailand's laws and
expects to be cleared in the investigation, with which they are
cooperating.

Temasek's senior managing director of investments, Jimmy Phoon, told
Dow Jones Newswires that Temasek's direct shareholding in the
telecommunications company was 41.7 percent.

In comments Friday, Singapore Prime Minister Lee Hsien Loong defended
Temasek's Shin Corp. deal as a "professionally made one, and a proper
one."

Regardless of whether the Temasek-Shin Corp. deal lasts, regional
investment is not likely to be a casualty, not as long as Asian
performance remains stronger than overall global growth, Cohen said.

"I don't think the political concerns here are any more inhibiting
than anywhere else in the developing world," he said. "There's a
continued wariness about selling off the family jewels to foreign
investors but balanced by the recognition that it brings some useful
benefits."

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Asia Times
Friday, October 13, 2006    

The democratic way to prosecute Thaksin

By Shawn W Crispin

BANGKOK - Thailand's new military-appointed interim government finds
itself on the horns of a crucial dilemma: how best to charge and
prosecute ousted prime minister Thaksin Shinawatra in a way that would
lend democratic legitimacy to its September 19 putsch.

Thailand's coupmakers first justified their takeover on the grounds
that Thaksin's rule was divisive, abusive and corrupt - not to mention
insulting to the crown. So far, military-appointed investigative
commissions have concentrated their energies on financial
irregularities and corruption allegations, including his family's
hot-button US$1.9 billion Shin Corp-Temasek Holdings transaction.

Yet thorough investigations into the ousted premier's abysmal
human-rights record would arguably send an even stronger signal to
both the international community and the Thai public that the
military's political intervention was just and necessary to return
Thailand toward a rule-of-law-based society after five years of
misrule under Thaksin.

As skepticism predictably entrenches against Thailand's new military
rulers, nothing arguably would contribute more toward genuine national
reconciliation and allay doubts about their own democratic intentions
and credentials than a vigorous investigation and follow-up
prosecution of Thaksin's many rights-based abuses. And investigators
clearly wouldn't have to look very far.

Thaksin's "war on drugs" campaign in 2003 resulted in the
extrajudicial killing of more than 2,500 people. Although local and
international media reported and recorded hundreds of cases of police
officials shooting and killing unarmed civilians - always in
self-defense according to official accounts - to date not one Thai
official has been prosecuted or even reprimanded for his or her role
in the unprecedented orgy of violence.

Thaksin's heavy-handed counterinsurgency policies in Thailand's
conflict-ridden south resemble an Augusto Pinochet-style dirty war.
Rights groups say hundreds of Thai Muslims have gone missing since the
conflict kicked up in 2004, a charge Thaksin has consistently
contested. Yet there are many examples of security forces implementing
his policies using arbitrary and often excessive force, including the
April 2004 siege on the Krue Se Mosque, the point-blank shooting in
the back of the heads of 19 restrained and handcuffed young Muslims at
Saba Yoi, and the October 2004 death by suffocation of at least 78
Muslim civilians at Tak Bai.

There are plenty of other cases where individual liberties, then
protected by the progressive 1997 constitution, were apparently
smothered without legal recourse by Thaksin's abuse of state power.
For instance, Thaksin has publicly admitted to state complicity in the
still-unresolved disappearance case of Muslim human-rights lawyer
Somchai Neelaphaijit, who was abducted by Thai intelligence officials
in Bangkok in an apparent effort to suppress his submitting evidence
of police torture of five detained Muslim men he was representing.
That damning evidence, it was later revealed, included medical proof
of security forces' using electric-shock treatment on one of the bound
suspects' testicles.

Then there is the mysterious unresolved shooting death of Kornthep
Wiriya, a former customs employee of Shin Satellite, the publicly
listed telecommunication concern established by Thaksin and until last
January majority-owned by his family. Kornthep apparently made the
mistake of agreeing to serve as a prosecution witness in a politically
charged 100 million baht (US$2.6 million) tax-evasion case against the
company. He was ambushed and shot in the head by unidentified
assailants while riding his motorcycle before he could testify in
court.

Subverting justice

All of these cases are on file at Thailand's National Human Rights
Commission and have been reported in either the local or international
media. Because Thaksin, who ironically holds a PhD in criminal
justice, exerted his extraordinary political power to subvert
Thailand's judicial system, none of these have been properly
investigated, and only the case involving the disappearance of Muslim
lawyer Somchai was heard in court. In that case, five secret-police
officials were given a slap on the wrist rather than prison sentences
for their admitted role in the lawyer's abduction.

The underlying problem in resurrecting and pursuing these cases of
apparent abuse is that too many of the crimes hit too close to home
for Thailand's new military-appointed government and would badly
undermine ongoing efforts to portray the military as the country's
democratic guardian of last resort. Because security forces, both
military and police, are no doubt complicit in many of the
aforementioned crimes, there are doubts among human-rights advocates
that Prime Minister Surayud Chulanont, a former army general, has the
political will to implicate its own.

Yet if these cases are pursued properly and not as a political
witch-hunt, Surayud has a historic opportunity to catapult Thailand on
to a higher democratic plane while also seeing through the next
crucial phase of the military-reform program he initiated in 1998 but
which was truncated when Thaksin took the premiership in 2001.

The international community is still wholly uncertain about which Thai
military has seized power - the abusive coupmakers of old or a new
generation of more democratic-minded generals. Past Thai-style
exercises in national reconciliation after political crises have
universally included blanket clemencies for those complicit in
state-sponsored violence and political killings.

The Thai military's counter-communism campaign and its attendant
crimes against members of the Communist Party of Thailand (CPT) in the
1970s and 1980s have never been properly investigated, according to
historians and human-rights advocates. Subsequent academic research
has uncovered that rogue military officials often covered their
abusive tracks by immolating captured communists in oil drums - a Thai
twist on the burning-your-enemy practice known as "necklacing".

Nor were any senior Thai officials brought to book for their role in
cracking down on unarmed pro-democracy protesters in 1973 and 1976 -
indeed, some even held high political office under Thaksin's rule. The
same is true for military officials involved with the killing of
scores, if not hundreds, of pro-democracy demonstrators on the streets
of Bangkok in 1992 - an episode in which Surayud was in charge of
crack troops. And, although it was not directly a human-rights abuse,
nobody was convicted for the widespread financial fraud in the wake of
the 1997 financial crisis.

Well-worn tradition

Impunity for high crimes, be they financial, official or human-rights
related, is a well-worn Thai tradition of behind-the-scenes elite
settlements. Obviously, with Thaksin's enormous financial clout, there
is a high risk that a similar settlement is reached that allows him to
return to Thailand a free man. But if Thai democracy must truly take
one step backward to take two steps ahead, then that shouldn't be the
case.

Past exercises in national reconciliation attended by blanket
clemencies, rather than moving Thailand's democracy toward a more
rules-based society, have over time left the door open for future
state-sponsored abuses. And that tradition arguably has failed to
achieve long-lasting reconciliation. Many former student leaders and
CPT members in Thaksin's political camp were instrumental in
implementing policies aimed at undermining the traditional elites that
opened fire on them in the 1970s.

Unpunished state-sponsored abuses against southern Thai Muslims in the
1960s and 1970s are still a cause celebre for a new generation of
insurgent fighters, who after a century within the Thai state still
feel like second-class citizens. One Muslim Thai senator once told me
that he had information that his father was captured by Thai security
officials and dumped into the ocean from a helicopter.

Any hints of a Thaksin whitewash will enrage the country's strong
progressive movement, which is already peeved about the possibility
that they will be under-represented during a new constitution-drafting
process. Blanket clemencies will only ensure that Thailand stays on
its same tortuous course vacillating between abusive democracy and
military interventions.

Yet there are early indications that that is exactly what the
country's military leaders have in mind. The coupmakers notably
included a blanket clemency for themselves in the interim constitution
they promulgated last weekend. And because intra-military and
intra-police relations are still dangerously divided between pro- and
anti-Thaksin camps, it seems unlikely that prosecuting wayward Thaksin
loyalists among the security forces is what Surayud's government has
in mind when it speaks of national reconciliation.

Thaksin famously snipped that "the UN is not my father" after a United
Nations human-rights official raised questions about official
complicity in his controversial "war on drugs" campaign. It was a
comment that grossly underscored the tough-talking former premier's
utter disdain for protecting basic human rights. It's the duty of
Thailand's new leadership to respond by investigating and prosecuting
Thaksin for his government's many human-rights abuses and, in doing
so, putting all future Thai politicians on notice that, besides
Thailand's respected monarch, the rule of law is indeed their father.

Shawn W Crispin is Asia Times Online's Southeast Asia editor.

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