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2006: Temasek buys Shin Corp

Deal taints Thai PM; OCBC sells Robinsons; bird flu peaks.
Monday, August 8, 2016 - 05:50
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SINGAPORE government-owned investment company Temasek Holdings announced plans in January 2006 to buy a 49.6 per cent stake in Thai conglomerate Shin Corp for 73 billion baht from the family of Thailand's then-Prime Minister Thaksin Shinawatra.

At first, the deal looked like a major feather in the cap for Temasek, giving it a major stake in a large telecommunications giant. But things quickly fell apart, as Mr Thaksin became embroiled in allegations of tax evasion and impropriety. Anti-Singapore sentiment flared up in Thailand, and Temasek eventually had to reduce its planned stake in the company.

The deal catalysed a chain of events in Thailand that led to Mr Thaksin resigning amid widespread protests, and eventually a military coup that removed his party from power. For sovereign wealth funds, negative nationalism was no longer a tail risk.

While Temasek was buying, OCBC Bank was selling. In order to meet regulatory restrictions against noncore assets, the lender invited bids for its stake in retail icon Robinson & Co. The retailer was eventually sold to Indonesia's Lippo group for S$203 million, marking the end of an era for Robinsons, which had become an institution in Singapore with fiercely loyal customers and staff. After a slightly contentious start in which board members resigned in the wake of the new major shareholder, Robinsons would eventually be sold again, completely, to Dubai's Al-Futtaim group in 2008.

Corporate deals were not the only things crossing borders in 2006. Cases of the H5N1 strain of avian flu peaked that year, showing up in various countries around the world, especially in Asia. With the scars of the 2003 Sars outbreak still healing, public concern was naturally elevated. But governments were more prepared this time, and the worst of the bird flu outbreak was largely contained.

The Business Times has been there to report and analyse the most significant news since 1976. Every week, this feature will showcase excerpts from the biggest stories for each year that the paper has been in operation. The full text of all the stories can be found online at bt.sg/bt_40