The Singapore investment company had also received the "best advice possible" and went into the US$3.8-billion (Bt139 bn) investment with strong Thai partners.

"It was not a reckless investment," Second Finance Minister Tharman Shanmugaratnam said in the Singaporean parliament yesterday.

Tharman was stating the government's position on Temasek's controversial purchase of Shin Corp shares this year from family members of former prime minister Thaksin Shinawatra, which resulted in a general takeover.

He fielded questions from five MPs, ranging from how the political risks of the deal were assessed to whether Temasek had broken any Thai laws and would incur losses from the transaction.

Explaining how Temasek approached the deal, Tharman said it had been guided by Thai legal experts as well as Thai and international investment advisers.

Temasek had also followed precedents set for foreign investments in Thailand and went in with reputable Thai co-investors, among them "a leading bank with a strong reputation in Thailand".

He also noted that Temasek had, to the best of its knowledge and abilities, acted in accordance with Thai law.  "This is a clean transaction on the Stock Exchange of Thailand, paid for entirely in Thailand. Totally clean. No influence-peddling."

"The government played no part in Temasek's decision to invest in Shin Corp. Temasek made its own commercial decision."

Asked by MPs about how Temasek assessed the political risk of investments abroad, Tharman said the company had a comprehensive risk-management framework in place.

"The decision on an investment is only taken after clear-headed business analysis and a weighing of risk-reward trade-offs. Temasek applied this process to its investment in Shin," he said.

When asked by Workers Party chief Low Thia Khiang to elaborate on how Temasek assessed the specific risks surrounding the Shin deal, Tharman said he would not be drawn into a discussion on that.

"I am not very keen to provide my own analysis ... of what the political outlook for Thailand was at the point that Temasek made its investment. Suffice to say that Temasek did obtain the best advice possible at the time."

Turning to potential losses from the deal, Tharman cautioned Singapore's parliament against becoming too alarmed by media reports of large paper losses. These are paper losses calculated based on the share price of Shin Corp today, not realised losses, he explained.

Shin shares last closed at Bt29.75 (S$1.27) per share, nearly 40-per-cent lower than the Bt49.25 per share Temasek paid earlier this year.

Erica Tay

Straits Times

Singapore