A Thai court agreed on Thursday to hear a case to revoke the licences of three Shin Corp affiliates over alleged violation of foreign ownership laws following Shin's $3.8 billion sale to Singapore's Temasek.
The ruling by the Supreme Administrative Court, which overturned a lower court's rejection of the case filed against state agencies, opens another avenue of investigation into the sale of Thaksin Shinawatra's telecoms empire.
The suit argues that the Shin affiliates - a mobile phone company, satellite operator and television broadcaster - lost their right to operate because the sale broke foreign ownership laws and fanned national security concerns.
"If the licences of the three firms are held by the management of foreign firms, it may cause damage and undermine the country's security because it could give them access to secret information about users in the telecommunications business," Judge Sompop Pongsawang said in his ruling.
The tax-free sale in January outraged Bangkok's middle classes and stoked street protests against billionaire prime minister Thaksin. These led to his overthrow in a bloodless military coup last month.
Army-appointed graft busters are now scrutinising the Shin sale as part of a wider probe into corruption allegations against Thaksin, who remains in exile in London, and his cabinet colleagues. On Monday, a separate Commerce Ministry probe found that Singapore state investment firm Temasek's purchase of Shin through several affiliates may have broken Thai laws, and it sent its findings to police.
Temasek, which has watched Shin's share price plunge since the deal was announced, has said it complied with Thai laws. The three firms affected by Thursday's ruling are Thailand's biggest mobile phone provider, Advanced Info Service, satellite operator Shin Satellite PCL and television broadcaster ITV PCL.
In his suit, Rangsit University law professor Satra Tohon argued that the Shin sale violated the Alien Business Law, which limits foreign ownership of Thai firms to 49 percent. He accused the Information and Communication Technology (ICT) Ministry, Transport Ministry and Prime Minister's Office - which issued the licences - of neglect.
The Central Administrative Court tossed out the case in March, saying Satra was not a contractual party to the deal. But Thursday's ruling said the foreign ownership of sensitive businesses such as satellites and mobile phone networks affected all Thais and the case should be heard. Officials at Shin Corp and AIS said they would cooperate with the court's investigation.
"We will have to wait for the judicial process. For our part, we complied with Thai laws," said Shin corporate affairs manager Rachadawan Sanitwong Na Ayuttaya. AIS spokeswoman Wilai Keangprdoo said service to 17 million customers would not be affected while the case winds its way through the courts.
Kitti Nathisuwan, head of research at TMB Macquarie Securities, expected the court to give the Shin companies time to change their shareholding structures to comply with Thai laws. "I don't think the court will revoke the licences because it will affect a large number of people," he said. Investor reaction was mixed.
AIS was off 1.1 percent at 87 baht, but Shin Corp shrugged off earlier falls to stand 0.9 percent higher at 29.25 baht. Shin Sat shares and ITV stock were both up 0.7 percent. The overall Thai stock market was up 1.1 percent.
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