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Thaksin children fined $320m for Shin Corp illegal, criminal deals with LKY, LHL, HC, Temasek

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  • Robert HO
    *Wednesday November 8, 10:50 PM* Thaksin s children fined and taxed 320 million
    Message 1 of 1 , Nov 8, 2006
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      Wednesday November 8, 10:50 PM

      Thaksin's children fined and taxed 320 million dollars for Shin Corp sale

      AFP  Photo

      The children of ousted premier Thaksin Shinawatra have been ordered to pay 320 million dollars over a controversial sale of shares in telecoms giant Shin Corp, a tax official said.

      Panthongtae Shinawatra and Pinthongta Shinawatra, Thaksin's son and elder daughter, had to pay a total of 11.7 billion baht (320 million dollars) in taxes and fines by the end of March next year, the official said.

      The family sold their 49 percent stake in Shin Corp to Singapore's state-run Temasek Holdings for 1.9 billion dollars under a tax-free deal in January.

      Normally when individuals sell a company stake, the proceeds are subject to a 30 percent capital gains tax, but the Shin Corp deal took advantage of a long-standing provision that scraps the tax if the sale is conducted through the Stock Exchange of Thailand.

      But the revenue department said now some of the Shin Corp transactions were made outside the stock exchange, thus subjecting Thaksin's children to pay taxes worth 5.6 billion baht.

      Ruengkrai Leelitwattana, an advisor to the auditor general, said financial regulators would also order the children to pay 6.1 billion baht in fines for failing to pay taxes following the Shin Corp deal.

      "Apart from taxes, they are subjected to pay fines for failing to pay taxes on time," Ruengkrai said.

      Thai Finance Minister Pridiyathorn Devakula said the payment order against Thaksin's children was not politically motivated following the bloodless coup on September 19 that toppled the Thaksin government.

      "Our decision was in line with the tax law. This had nothing to do with the (post-coup) government," the minister told reporters.

      But Thaksin's legal adviser Noppadol Pattama disagreed with the decision and Thaksin's children were ready to fight in court over the tax order.

      "We closely consulted with the revenue department, which had told Thaksin's family that they did not have to pay taxes" as long as stock transactions were made through the stock exchange, Noppadol said.

      "We have to prove legally that we have done everything in accordance with Thai laws," he said.

      The 1.9 billion dollar sale triggered months of street protests demanding Thaksin's resignation over alleged abuse of power and corruption, which eventually led to the coup against him.

      After the 49-percent buyout of Shin Corp, a Temasek-led group of investors increased its total stake to 96 percent through a mandatory offer for the outstanding shares, sparking allegations of a possible violation of foreign ownership rules here.

      Under Thai rules, foreign investors can own up to 49 percent in telecom companies. The question is whether local entities acted on Temasek's behalf, in which case their holdings might not be counted as separate.

      The post-coup Thai government has vowed to investigate the deal. A Thai court is due to hear a case against Shin Corp, now under control of Temasek Holdings, for alleged violations of foreign ownership regulations.

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