[Tlc] T-Taksin case

[justinm at ucr.edu]

>From Al Valentine.
Thanks,
justin

http://www.asiasentinel.com/index.php?option=com_content&task=view&id=1122&Itemid=31

PS-Great photo too...

 
Brian McCartan   
28 March 2008

Did Thaksin really push the original loanfor personal gain? Stay tuned for courtroom drama


thai-samakThai Prime Minister Samak Sundaravej has cleared the way topay the remainder of a controversial US$120 million soft loan by theExport-Import Bank of Thailand to the Burmese government that played a role inthe political demise of Samak's predecessor, ousted premier Thaksin Shinawatra.

Samak's order clearing the release of the remaining fundscame one day after his return from a March 15 meeting with Burma's top leader, Senior GeneralThan Shwe, in the Burmese capitol Naypyidaw.

Noppadon Pattama,Thailand'sforeign minister and former lawyer for Thaksin, said the loan was revived because'political wrangles' should not get in the way of building ties withneighbors. 'Thailand'sinternal problems have no effect on the right of Burma to get the money,' hesaid.

Thailand'sAssets Examination Committee alleges that Thaksin abused his powers inincreasing the loan in order to benefit Shin Satellite, a subsidiary of his familybusiness, Shin Corp. Following the 2006 coup that ousted him, the loan wassuspended due to allegations that Thaksin's business interests would profitfrom the loan.

In addition to the potential profit Shin Corp – now owned bySingapore's Temasek Holdings ‑ may receive out of the renewed loan, the newThai government seems keen on assisting Burma's military rulers any way theycan. The clearance for the loan followed comments by Samak that Burmawas a country at peace because it is run by a regime of meditating Buddhistsand that, 'killings and suppression are normal there.' Noppadon,during a visit to the United States,furthered stepped up Thailand'sengagement policy with Burmaby telling reporters,

'We have to help Burmaand engage them,' he told reporters following a meeting with USSecretary of State Condoleezza Rice in which he reportedly said US sanctionsagainst Burma would achievenothing and encouraged the USto engage in multinational talks instead.  I would have loved to seen Connie's face when those words were spoken! Ah, the millions of USD we pour into Thailand, that's no big deal.

The assets body is set to rule on Monday whether Thaksinwill have to stand trial for his involvement in the soft loan to Burma.Sak Korsaengruang, the assets panel chairman, said he would recommend that Thaksinbe tried as the sole defendant. The committee had previously agreed to presscriminal charges against Thaksin in August 2007.

The loan is one of four charges laid against Thaksin forabuse of authority during his time in power. The charges are all related toalleged concealment of shareholdings in Shin Corp and his administration'salleged favoritism towards what was then the family telecoms empire. Togetherthe charges carry the possibility of 26 years of imprisonment. Shin Corporationwas sold to Temasek Holdings of Singapore in January 2006. Whether the sale ofShin Corp was improper is one of the charges being investigated by the AEC and US$2.1billion of the $2.3 billion Thaksin's family gained from the sale has beenfrozen.

The investigation into the Burma loan centers on Thaksin'salleged role in ordering the Exim bank to lend an additional $28.8 million ontop of $96 million already loaned to the Burmese government to improve itstelecommunications infrastructure. According to the asset committee'ssecretary, Kaewsan Atipho, the loan came with the condition that Burmabuy materials and services from Shin Corp's subsidiary, Shin Satellite Plc, asatellite, broadband internet and fiber optic firm.

Thailand'sMatichon newspaper reported in August2004 that Burma'sMinistry of Posts and Telecommunications had requested funding for threetelecommunications projects worth over $30 million as a part of the Exim Bank'sloan. The reportedly used the loan to buy telecom equipment to link up with theiPSTAR satellite owned by Shin Satellite and used the satellite's services toprovide mobile phone and broadband internet services.

Thaksin's role allegedly not only allowed Shin Satellite toprofit from the purchase of goods and services by the Burmese government, but also transferred any business risk from the project to the Finance Ministry. TheFinance Ministry is legally responsible for risk surety on loans made by theExim Bank and the AEC estimates that the deal caused $3.2 million in damagesfrom the interest subsidy paid by the Finance Ministry to make the loanavailable.

Following the loan agreement, Shin Satellite leasedsatellite services for broadband internet and telephone services to BaganCybertech Ltd. in 2004. The company was nationalized and placed under the controlof Mynamar Post and Telecommunications in 2005 after its owner, Ye Naing Win,son of deposed Prime Minister Khin Nyunt, was jailed on corruption charges.

Although Thaksin and his lawyers maintain that the formerpremier had nothing to do with the loan, former Deputy Prime Minister SurakiartSathirathai told the assets committee on April 30 2007 that Thaksin himselfgave the order to lend Burmathe money. Surakiart, who was Thaksin's foreign minister at the time, claimsthe loan was given over his objections that the funds were going to be used bythe Burmese for leasing satellite transmission signals from a satellite ownedby Thaksin's family. He also claimed that Thaksin not only ordered the approvalof the loan but for the Exim Bank to increase the loan by $28.8 million so Burma could buy extra telecoms equipment andservices from Thailand.

The loan proposal was reportedly approved in February 2004and an agreement was signed with the Myanmar Foreign Trade Bank (MFTB) in June2004. The soft loan was granted at special interest rates of 3 percent perannum with a five year grace period on payment of the principal. The money wasto be used by the MFTB to allocate loans to various Burmese agencies topurchase capital goods and services from Thailand. The original loan was forroad construction and infrastructure improvement and the Exim Bank argued theloan would create jobs and income for 16 Thai export firms as well as boostties with a neighbor.

Thaksin sued the assets committee in August 2007 for defamation,accusing the spokesperson for the committee of telling reporters that Thaksin orderedthe loan increase. The papers allege that this caused the public to falselybelieve Thaksin ordered the increase for personal gain. The suit claims theloan was based on a contract between the Exim Bank and the Burmese governmentand Thaksin had no power over the decision. Thaksin has asked for compensationof $45 million with interest

What remains unclear is how much of the Bt4 billion(US$126.9 million in current dollars) remains unpaid. Noppadon has said thatonly $32 million has been given so far. The Exim Bank, however, said in aSeptember 2007 statement that all but $11 million had already been given.