STREET WISE
The hot cinder known as Cedar
Since the 1997 financial crisis, it has been a major policy among banks to unload their stakes in non-core companies - those not considered supportive to banking operations.
Siam Commercial Bank is no exception. So it came as a surprise when SCB emerged as one of the shareholders of Cedar Holdings Co Ltd, one of the two companies that jointly took over Shin Corp Plc. SCB first held a 10-per-cent stake in Cedar, but after the company raised capital to finance a tender offer for the remaining shares of Shin Corp, SCB forewent the rights and saw its stake diluted to 5 per cent. The surprise in seeing SCB on the list of Cedar shareholders is because Shin Corp is not an industry which can support its banking operations. And it's even more surprising that SCB is now considering to sell off its stake in Cedar, following the Commerce Ministry's investigation which could implicate Cedar as a nominee of Temasek - a chain-reaction effect from the ruling that Kularb Kaew, a major shareholder of Cedar, could be a nominee of Temasek. SCB president and CEO Khunying Jada Wattanasiritham said on Wednesday the bank may sell its stake in Cedar, apparently to distance itself from the investigation. But then, there remains a question - who will emerge as a buyer? Certainly, it could not be Temasek as that would push Cedar's foreign ownership above the 49-per-cent statutory limit. Given that the nominee investigation into Cedar is not yet complete, any new shareholder would automatically be probed. Surely, anybody who comes forward to buy the stake would be in the spotlight. There will always be the question of whether that person or company represents Temasek. It will be really interesting to see who would risk getting involved in the much-heralded nominee investigation. In another case, Thai AirAsia was lucky to have welcomed Sittichai Veerathummnoon as an indirect shareholder. Little-known businessmen Sittichai, who was to date known as a former executive in a logistics company, helped the company to continue to be eligible for its aviation licence. He teamed up with Shin Corp to set up Asia Aviation, which in turn holds a 50-per-cent stake in Thai AirAsia. Thai AirAsia is of course happy to keep its aviation licence, although Asia Aviation will be investigated by the Commerce Ministry. But Thai AirAsia was very lucky to have Sittichai. Will SCB be so lucky?
achara_d@nationgroup.com
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