A very well-informed source, who is following this Deal of the Century closely, said the Thai public had yet to digest the full implications of Temasek's Bt73.3-billion takeover of Shin Corp, although many of them were feeling uneasy about Singapore's control of several Thai concessions, from mobile phones to satellites to television.

"Since Temasek is 100 per cent owned by the government of Singapore, you can say that Shin Corp has become a state enterprise of Singapore," he said. "The deal will prove to have far-reaching implications for Thai-Singapore relations."

There has been growing nervousness in Thailand over Singapore's big-bang arrival with the takeover of Shin Corp. Last week a group of civic, labour and democracy activists, led by Dr Weng Tochirakarn, rallied in front of Singapore's embassy in Bangkok to demand that Temasek nullify its Shin Corp deal.

The group said Temasek's control of Singapore amounted to an attempt to dominate Thailand's economy and sovereignty because Shin Corp's affiliates operated satellites, a mobile-phone network, a low-cost airline, a high-speed Internet service and TV stations.

"We ask that the deal be scrapped in order to maintain the good relations between the two countries," the group added.

Established in 1974, Temasek is an investment agency of Singapore, an outgrowth from its status as a super-holding company of Singa-pore's state enterprises. The Thaksin government once raised the idea of setting up a super-holding company in the same style as Temasek, but this move never materialised.

The proceeds from Singapore's privatisation of the state enterprises will go to the national budget and also to Temasek. Over time, Temasek has grown in size and in investment scope.

The Government of Singapore Investment Corporation (GSIC) was set up with seed capital from the international reserves of the Monetary Authority of Singapore. Singapore's current-account surplus made it possible to establish the GSIC.

According to Temasek's official website, today Temasek manages a diversified global portfolio of 103 billion Singapore dollars (Bt2.5 trillion), principally in Singapore, the rest of Asia and the OECD economies. Its investments are in various industries: telecommunications and media, financial services, property, transportation and logistics, energy and resources, infrastructure, engineering and technology, as well as pharmaceuticals and bio-sciences.

Its total shareholders' return since inception is 18 per cent compounded annually. It has corporate credit ratings of AAA by Standard & Poor's and Aaa by Moody's.

The most controversial aspect of Temasek's takeover of Shin Corp is that at one fell swoop it has mustered control over key concessions in Thailand, arousing fears of Singaporean domination.

The second aspect of the takeover is that Prime Minister Thaksin Shinawatra himself has been seen as selling the national assets to Singapore, the source said. This is the underlying reason why his popularity has been sinking sharply since the announcement of the deal on January 23.

The anti-Thaksin coalition has broadened to include academics, students and other activist and democracy groups, and they have demanded his resignation because his sale of Shin Corp looks as if he has put his family's business interests above those of the country. Thaksin has finally caved in by announcing a House dissolution.

The Shin Corp deal is still hanging in the balance, although the transaction has been completed. People in the capital market say the takeover comes with a "put option" attached, which means that if something goes wrong, like A mass protest in front of the Singaporean Embassy or destruction of Shin products and services, the two parties can cancel the deal altogether.

"The legal term is 'condition consequence'. In case the deal does not work out, the buyer can scrap the deal and get the money back," one lawyer said.

Thanong Khanthong

The Nation