ICT Ministry panel to study Thaicom's status after Thaksin verdict

The Supreme Court’s Criminal Division for Political Office Holders in its verdict cited many actions during Thaksin’s administration that showed he had abused his power to benefit his telecom empire.

One example is that the ICT Ministry in 2004 allowed InTouch to reduce its shareholding in Thaicom from 51 per cent to 41 per cent without the Cabinet’s approval. This in effect reduced Shin Corp’s investment burden while passing risks to smaller shareholders.

Shin Corp is now know as InTouch, and the renamed firm is bound by the original contract to maintain a minimum ownership in Thaicom of 51 per cent throughout the satellite operator’s 30-year concession.

Chaiyan Peungkiatpairote, the new permanent secretary of the ICT Ministry, said this week that the reduction of InTouch’s shareholding in Thaicom did not appear to have any significant impact on the latter’s operations and that InTouch was still its major shareholder.

According to Thaicom, every time it calls a shareholders’ meeting, 60 per cent of the shareholders come, of whom 41 per cent are InTouch representatives and the rest are minor shareholders, he said.

InTouch has also informed the Stock Exchange of Thailand that it would not allow any party to own more than 25 per cent of Thaicom, he said.

In July, Somprasong Boonyachai, executive chairman of InTouch, said it had no plan to raise its stake in Thaicom back to 51 per cent or more, as the court’s verdict to confiscate the assets of Thaksin concerned Thaksin, not the group’s subsidiaries.

Also according to the court ruling, members of Thaksin’s cabinet had allowed Thaicom to change the terms of its concession to launch iPStar as its main satellite, rather than launch a backup satellite for Thaicom 3.

Chaiyan said the ministry was still collecting concession revenue from Thaicom as usual, part of which was from the iPStar business.

InTouch and Thaicom executives once asked the previous government why it was still collecting royalties from Thaicom if it deemed iPStar an out-of-concession satellite.

Also according to the court ruling, Thaicom appeared to violate its concession when it used insurance payments of US$6.7 million (Bt206 million) to lease transponders from foreign satellite operators to serve customers before the Thaicom 5 launch, instead of remitting the whole amount to the Transport Ministry, which was in charge of the satellite’s concession at the time.

As a result of irreparable damage to the Thaicom 3 satellite in 2003, Thaicom received insurance proceeds of $33 million, which was placed in an escrow account in Singapore. It used most of the money to make a down payment for the construction and launch of Thaicom 5 and to lease transponders until the launch of Thaicom 5.

Chaiyan takes the view that Thaicom has used the insurance funds to continue expanding its satellite business.

He also said Thailand was waiting for the International Telecommunication Union officially to recognise Thailand’s continued right to use the 50.5 degrees east longitude orbital slot, after Thaicom’s recent positioning of an interim satellite at that slot. The ITU recognition is expected next year.

The previous government assigned Thaicom to seek interim satellites to fill the 120 degrees and 50.5 degrees east slots in the government’s effort to preserve the country’s legal right to use these orbital slots before the right expires.

Thaicom chief executive officer Suphajee Suthumpun said yesterday that Thaicom placed an interim satellite at the 50.5 degrees slot on August 27. The country’s right to this slot is due to expire next month.

Thaicom and Hong Kong’s Asia Satellite Telecommunication jointly placed an interim satellite at the 120 degrees slot late last year. In June this year the National Broadcasting and Telecommunications Commission’s telecom committee approved a satellite network licence for Thaicom, allowing it to operate any of its satellites in the 120 degrees slot.