Singapore's troubled Shin Corp deal - Asia Times 13 December 2006

By Thitinan Pongsudhirak

No other country's ruling family does it quite like the Lees of Singapore. National founder Lee Kuan Yew built a gleaming metropolis out of a swampy island in four quick decades of rapid economic growth.

His son, current Prime Minister Lee Hsien Loong, has made a priority of carrying Singapore's economic-development miracle forward through diversifying its investment in the region.

The younger Lee's wife, Ho Ching, and brother, Lee Hsien Yang, spearhead Singapore's interlocking state-owned investment vehicles, which are fortified and facilitated by a web of often-opaque cross-share holdings.

Despite pockets of opposition disenchantment, few outsiders would dispute that Singapore is a place where things get done because of an enlightened consensus among its political elites, underpinned by the country's geographically and historically peculiar strengths.

But Singapore's state-engineered, elite-driven economic success at home has recently been embroiled in controversy and alleged scandal when venturing abroad. The most glaring example involves state-run Temasek Holdings' purchase last January of Thailand's Shin Corp, a communications conglomerate founded by recently deposed prime minister Thaksin Shinawatra and majority-owned by his family.

This year, Temasek's US$1.9 billion buyout of the Shinawatra family's 49.3% stake in Shin Corp added fuel to the fire of the popular protests that climaxed in the September 19 military coup that upended Thaksin's government.

The controversial transaction apparently surpassed legal limits on foreign ownership of crucial national infrastructure, including telecommunications frequencies, which Shin Corp operated through a government concession. (Read more...)