New TOT board may order cleanup

THAILAND: New TOT board may order cleanup
All telecom agreements to come under microscope

Bangkok Post
Wednesday, January 31, 2007

By Komsan Tortermvasana

TOT Plc is expected to carefully review agreements made under the ousted civilian government now that Gen Saprang Kalayanamitr, the assistant army chief and deputy secretary-general of the Council for National Security, is chairman of the board. The soldier's first move was to hand-pick three army colonels and Dr Vuthiphong Priebjrivat, a vocal critic of twice-elected Prime Minister Thaksin Shinawatra, to sit on the 14-member board of directors at the state telecom enterprise.

The appointments are seen as being aimed at cleaning up questionable telecom concessions and deals, and also to put an end to lobbying efforts by private operators for state telecom projects. The full list of directors has been forwarded to the Finance Ministry for approval because it is the major shareholder of TOT.

Private operators expressed disappointment over certain new directors, particularly Dr Vuthipong. He was well-known as an activist who strongly opposed the Thaksin government, one operator said.

The three colonels on the board are Col Natee Sukolrat, Col Ratanaphan Rojanapirom and Col Narikatipak Saengsanit, the son of Gen Viroj Saengsanit, a former Class 5 member of the Chulachomklao Cadet Academy and also a former Thai Rak Thai party member. He shifted later to the Chart Thai party.

The civilian directors are Chavalit Sethameteekul, Supha Piyajitti, Kitti Tirasesth, Chit Laowatana, Phaibul Nititawan, Viraphol Panabutr, Sompob Banthornvipark, and Surachai Liengboonlertchai.

Only Mr Chavalit and Dr Kitti were left from the board chaired by Gen Montri Supaphon, who resigned after the Administrative Court banned TOT from blocking new DTAC mobile phone numbers from accessing its fixed network.

An industry source said it was very likely the new TOT board would scrutinise each telecom concession, some of which are also awaiting further interpretations by the Council of State, the government's legal advisory body. In particular they will look at whether TOT could scrap any existing concessions over breaches of their original terms, such as the decisions by two mobile operators to stop paying access charges in favour of interconnection fees.

In a related development, an investigation into allegations that Shin Satellite had breached its concession contract found no serious violations that would have resulted in damages to the state, according to Sitthichai Pookaiyaudom, the Information and Communication Technology (ICT) minister.

It was merely a technical error that caused no damage, and did not hurt users, he said after meeting with Shin Satellite chief executive Nongluck Pinainitisart.

Such a technical error could not lead to either the seizure or revocation of the company's satellite operating concession, he said. But he plans to appoint a six-member panel to go through all the issues again in 60 days.

The minister had earlier designated his personal legal team to look into several allegations. One was that Shin Satellite had failed to provide a backup for the broadband satellite iPSTAR. The concession granted by the ministry mandates that satellites must each have one reserve.

Dr Sitthichai has questioned whether iPSTAR could be considered as a backup satellite for Thaicom 3, given that the former is a broadband satellite and the latter is a conventional broadcast satellite.

On this issue, Dr Nongluck insisted that the company had maintained reserve for its Thaicom 3 by building Thaicom 5 as a backup. "I can assure that the country and the people are not damaged by our backup policy," she said.

Dr Sitthichai was also concerned that the ICT Ministry in the past had amended Shin Satellite's concession to allow Shin Corp to reduce its stake in the satellite firm close to the minimum 40%, from 51%.

This raised questions as to whether it was done to pave the way for foreign investors -- Temasek Holdings of Singapore -- to buy Shin and its subsidiaries without breaching the laws governing foreign shareholding in local firms.

Shin Satellite's original concession required Shin to maintain a stake of at least 51% for the whole concession period of 30 years. In 2005, Shin Satellite raised capital through a public share offering, which diluted Shin's stake to 41.56%.

Date Posted: 1/31/2007