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Published on September 14, 2007

The Assets Examination Committee has made public damaging evidence against Thaksin Shinawatra, who has been found to have concealed assets offshore and continued to rely on nominees to hold them on his and his wife Pojaman's behalf while he was still serving as prime minister. This has prompted the SEC to react, reluctantly though.

Yesterday the SEC issued a statement to say that it would follow up on the case by asking for information from the AEC. It would further probe Thaksin's alleged concealment of Win Mark Ltd as an offshore nominee, and alleged insider trading committed by Win Mark.

The AEC has come up with several crucial findings. First, Thaksin was still the beneficial owner of Ample Rich Investments Ltd, at least between 1999 and 2005, before Panthongtae and Pinthongta, two of his children, took over the firm. Thaksin was serving as prime minister between 2001 and 2006, during which time several government policies were introduced allegedly to favour Shin Corp and boost its stock price. Ample Rich Investments held about 10 per cent of Shin Corp shares.

Second, Thaksin failed to report that he was the beneficial owner of Win Mark, which shares the same address as that of Ample Rich in the tax-haven of the British Virgin Islands. Thaksin and his family claimed that they owned only 49 per cent in Shin Corp, which was sold to Temasek Holdings of Singapore for Bt73.3 billion. But in fact, according to the AEC, Win Mark held almost 2 per cent of Shin Corp in order to assure the Shinawatras' management control of 51 per cent.

This Win Mark holding of almost 2 per cent in Shin Corp shares had never been reported until the AEC's findings announced earlier this week. Win Mark had held about 55 million Shin Corp shares in an account managed by UBS AG Singapore since 1999. Just before the sale of Shin Corp to Temasek in January 2006, Win Mark bought the Shin Corp stocks and accumulated them to the tune of 113 million before selling them all for a profit of Bt500 million.

The AEC now suspects that Win Mark's accumulation of Shin Corp stocks ahead of the deal with Temasek involved insider trading.

Win Mark has already caused trouble for Thaksin. On June 19, the Department of Special Investigations indicted Thaksin, Pojaman and Busaba Damapong on concealment charges in a case linking Win Mark with SC Asset, another real-estate company owned by the Shinawatras.

In 2000, Thaksin said he sold shares in three property companies - OAI Property, PT and SCK Asset - to Win Mark for a total of Bt906 million. He said Win Mark was a foreign company and denied that it belonged to him.

Later it was discovered that Win Mark also held shares in two other companies: SC Office Park and Worth Supplies. The total investment in the five firms was Bt1.5 billion. In Thaksin's 2000 statement, the former prime minister said Win Mark had bought the shares on the expectation of reaping profits when the firms were listed.

However, Win Mark sold its shares in OAI Property to the Value Asset Fund of Malaysia (VAF) in 2003, and three weeks later VAF sold the shares to the Overseas Globe Fund and Offshore Dynamic Fund Inc. The three funds share the same address in Malaysia. Remarkably, the sale took place before OAI Property, later renamed SC Asset, was about to list on the SET in November 2003.

VAF also transferred the right to buy 70 million new shares of OAI at Bt10 par value to Thaksin's daughters Pinthongta and Paetongtarn. Based on the initial public offering of Bt15 a share, the two automatically netted a total profit of Bt350 million. Now the Department of Special Investigations and the AEC are pursuing criminal cases against Thaksin in earnest, which will eventually involve extradition efforts.

Compared to its crusades against executives of smaller listed companies in the stock market, the SEC has been reluctant to investigate the Shin Corp deal. It has maintained that its investigation - which is seemingly going on forever - can only proceed under the securities law.

However, scandals related to the Shin Corp deal have been investigated and disclosed by others such as Prasong Visuit of Matichon newspaper and two co-authors by the pen names of Ma Nok and Dek Nok Krop. The pair have written two books to point out what was wrong with the Shin Corp deal.

The do-nothing attitude of the SEC has prompted Kaewsan Atipho, a member of the AEC, to throw a clever jibe at the exchange watchdog.

SEC, in the Thai language, uses the letters Kor Lor Tor. Kaewsan's witty word play mentions the words Ku Luem Tam - "I forgot to follow up".

Thanong Khanthong