I had remained fairly ambivalent about the Temasek Holdings purchase of Shin Corporation, and the ensuing controversy that that entailed. On one hand, being the last straw that brought the government down is hardly something to be proud off, let alone sitting on large paper loss. On the other hand, the whole purchase could have been attributed to little more than a bad business move, one that would cost Temasek Holdings approximately 1 billion Singapore dollars.
Until now.
I learnt today about how Temasek Holdings had tried to hire one MR1 Tongnoi Tongyai, who had claimed to a Royal aide. That was Tuesday. On Thursday Temasek had apparently backed out of the appointment without any explanation. The bombshell fell on Saturday, when the Personal Affairs Office of HRH Crown Prince Vajiralongkorn issued a press release vigorously denying that Tongyai had any current links with the Crown Prince:
[T]he claims were false and were used as a means to establish influences for [Tongyai's] own business benefits. The claims have caused damage not only for thecountry, but also instability for the international investment in Thailand.
In fact, MR Thongnoi Thongyai is a cunning man and has improper personal characters. He was not permitted to extend his term as HM’s Deputy Principal Private Secretary[...]
However, he has been tricky and cunning. He usually liked to claim and link himself to HRH Crown Prince. When he worked, he usually had hidden agenda and his works often lacked transparency. These caused dissatisfaction among his co-workers at all levels.[... Tongyai] On the contrary, he took advantage and made false claims for his own benefits by setting up his positions which led him to be approached to be an advisor to Temasek Holdings.
Yawning Bread had pounced upon this proclamation to declare that:
Temasek might not have done sufficient political due diligence prior to finalising its purchase of Shin Corp, thus causing the political problems it now faces [...] this incident may muddy its goodwill with the Thai royal family.
However, Oikono, who had talked with a friend of Thaksin, notes that Thaksin and the Crown Prince were friends, leading him to speculate that the Crown Prince may want to dispel any notions of giving Tongnoi any kind of preferential treatment, and sothe press statement may be little more than damage control to dissociate the Royal Family from the shady dealings of Thaksin and Tongnoi.
An interesting speculation; on the other hand, The Nation newspaper of Thailand appears to agree with Yawning Bread. This livid editorial appeared yesterday over this attempted appointment, charging that
It was obvious Temasek had been seeking a connection with Tongnoi, believing his high standing and prestigious connections might be able to provide some sort of protection from current investigation by the Thai authorities[...]
Apparently, Temasek Holdings has not learned from the painful lesson from its past association with the corruption-prone Thaksin Shinawatra. Instead of accepting the reality of its position, Temasek seems to have chosen to seek a solution to its precarious position by tapping into Thaksin’s power of patronage to cut corners[...]
The scandal involving Tongnoi is its latest stumble and it could prove costly to its attempts at damage control and the restoring of its corporate image. What appears to have occurred here would give the lie to Temasek’s supposed world-class standards of governance and business ethics.
We can only hope this is the last such stumble for Temasek. It must remove any cloud of uncertainty surrounding the Shin Corp deal. If it tries to think that it can manipulate persons supposedly occupying positions of influence in Thailand in order to find a quick-fix to its embarrassing situation, then it is a bad miscalculation.
It is clear that despite earlier political rhetoric about how bilateral relations between Thailand and Singapore would not be affected too badly over the Shin Corp issue and the coup d’état, it now looks like the interim Thai government is giving Singapore the cold shoulder, in the sense that they don’t plan to help Temasek bail out of the Shin Corp purchase. The Nation newspaper reports that “In a rare move, [Singaporean Prime Minister Lee Hsein Loong] sought a way out for Temasek, which is the Singapore government’s investment arm./Hehad been quoted as saying on several occasions the takeover of ShinCorp was based on business judgement alone and had nothing to do withthe Singaporean government.” Despite this, the Thai government has instead steadfastly refused to intervene in the judicial proceedings in investigating
- whether the Thai government had screwed up by not revoking the licenses of the appropriate Shin Corporation subsidiaries after the purchase by Shin Corporation, since Thai law explicitly forbids foreigners from owning more than a 49% state in local companies, and
- whether Temasek Holdings had wilfully violated the foreign ownership laws by using proxies to cover up the fact that it actually ended up owning a larger fraction of Shin Corp than was allowed legally.
In short, the Thai authorities are telling Temasek that since they dug themselves into this hole, Temasek will have to deal with the repurcussions on its own, and not even the direct intervention of the Prime Minister is going to help one iota.
It disgusts me how mutable the truth is in the hands of those who rule Singapore. First MP Wee Siew Kim doing an abrupt double-take when he realized the magnitude of his boo-boo, while still trying to save face; now this. Is this the side effect of forty-one years of rigidly pursuing a political “ideology” of pragmatism, that our Singapore leaders feel that it is acceptable to switch sides on anything, if they felt that it suited their purposes? That’s not being pragmatic so much as being utterly and completely spineless.
People in Thailand were sick of Thaksin abusing his position of power; a forcible removal of Thaksin from that position of power was the result. Must we in Singapore wait until things fall apart to the same extent before our leaders wake up and smell the flowers fertilizer?
I guess this is yet one more thing to chalk up in the comparison of Lee Hsien Loong’s Singapore to a contemporary Orwellian 1984. Let the palimpsest of the Official Stand change evermore!
P.S. The current Thai PM, General Surayud Chulanont, is currently attending a China-ASEAN summit.No doubt he will be the main attraction at the event, as the wholeregion tries to map out the new Thai polical landscape. The planned bilateral talks with Singapore turned up little information apart from announcing an official visit within the next three weeks, so I suspect that more news will be coming in short order.
P.P.S. Ironically, the Shanghai Daily reports that
Central Huijin Investment Co, the investment arm of China’s central bank, will be positioned as a Chinese version of Temasek Holdings, a senior central bank official said[...]
[Wu Xiaoling, deputy governor of the People's Bank of China] said Central Huijin’s operational background was similar to that of Temasek and it could learn from the experience of Temasek, which owns the Singapore government’s direct investments, both locally and overseas.
For their own sakes, I hope that China really will “learn from the experience of Temasek”, as they had put it. China’s pollution problem is already bad enough without throwing in Shin-Corp-style economic stinkbombs.
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