However, chief executive Sigve Brekke yesterday said he needed more details on the amendments to evaluate the situation.

He added that what he has seen so far does not point to any major change to the telecom industry, and whatever the change, DTAC would comply.

Telenor Asia owns 47 per cent of United Communication Industry (Ucom), DTAC's parent company, while Thai Telco Holdings has 42 per cent. Telenor Asia also has 49 per cent of Thai Telco.

Ucom owns 43 per cent of DTAC, while Telenor Asia has 33 per cent and TOT 6 per cent.

Brekke said that both Ucom and DTAC are mainly Thai-owned and Thai nationals have the majority of the voting rights.

Finance Minister Pridiyathorn Devakula said yesterday that draft amendments to the Foreign Business Act would not fully apply to telecom operators as they fall in Annex III of the law.

Foreign investors in Annex III will be required to cut shareholding to a limit of 49.99 per cent, but they would not have to reduce voting rights to the limit of 50 per cent, unlike firms in Annexes I and II.

The inclusion of telecom firms in Annex III means foreign investors can retain control of the firms.

However, Thai Telco is among 13 companies facing a Commerce Ministry probe into whether they act as nominees for foreign shareholders wanting to take control of local telecom operators.

Another company on the ministry's suspect list is Kularb Kaew, which is part of the group led by Singapore's state investment arm Temasek Holdings that took over Shin Corp in January last year.

A source familiar with the amended Act said yesterday it is too early to say whether any of the former businesses of ousted premier Thaksin Shinawatra, including Shin Satellite, low-cost airline Thai AirAsia, iTV, and Advanced Info Service, violate the existing or even the amended Foreign Business Act by using nominees. This depends on the Criminal Court's verdict in the Kularb Kaew nominee case. The case is currently under police investigation.

"The court's final decision will pave the way for officials to step forward in the investigation of those companies linked with Kularb Kaew," the source said.

A source at a leading international law firm said he did not think the amendments to the Foreign Business Act target businesses with foreign shareholding. On the other hand, it appears to provide an amnesty to them to legalise any violations relating to their foreign-shareholding, or voting-right, structure.

According to the draft amendments, companies that operate under Annexes I and II and violate the Foreign Business Act will be required to revise their shareholding structure and voting rights to below 50 per cent within a maximum of two years.

Foreign companies that have used nominees to circumvent the ownership law must report their true status to the Commerce Ministry and will be given one year to comply with the law by reducing their stake to less than 50 per cent.

Ayudhya Securities Plc said in a report yesterday that if Kularb Kaew is ruled by the court to be a nominee, then Shin as well as its subsidiaries are likely to be defined as foreign companies.

If Kularb Kaew is a nominee, Shin would be regarded as a foreign firm with a foreign shareholding of 96.3 per cent, of which 54.4 per cent belonged to Cedar Holdings and 41.8 per cent to Aspen Holdings. Both are Temasek-linked firms. In addition, the foreign voting rights would be above 50 per cent, according to the amended Act.

This will trigger a chain reaction and even subsidiaries like AIS and iTV will become foreign firms. Shin Satellite and CS Loxinfo Plc, despite their foreign shareholding of less than 50 per cent, have foreign voting rights of more than 50 per cent. Thus, Shin and its subsidiaries would need to adjust their shareholding once the amended Foreign Business Act takes effect.

If the court rules that Kularb Kaew is not a nominee, then Shin and its subsidiaries would qualify as Thai firms. Only Shin stake-holder Aspen Holdings, with 41.8 per cent, would be a foreigner. In that case, Shin and its subsidiaries won't need to adjust the shareholding structure.

Business Reporters

 The Nation