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Thu, Jun 14, 2007 - Page 10 News List

AirAsia managers purchase Shin Corp stake

AFP , BANGKOK

Shin Corp, the Singapore-controlled telecom giant founded by Thailand's ousted former prime minister Thaksin Shinawatra, said yesterday it has sold its stake in budget airline Thai AirAsia to focus on its core telecoms business.

Shin Corp's 50 percent stake in the nation's top low-cost carrier sparked public controversy last year after Singapore's state-linked Temasek Holdings bought the telecoms company.

Critics argued that a foreign firm should not control a domestic airline and that the deal violated Thailand's foreign ownership laws.

To comply with the ownership law, Shin Corp last year set up a Thai company called Asia Aviation to control its shares.

Thai businessman Sittichai Veerathummnoon controlled 51 percent of Asia Aviation with Shin Corp holding 49 percent.

Shin Corp has now sold those remaining shares to a group of six of the airline's managers, led by Thai AirAsia chief executive Tassapon Bijleveld, the company said in a filing to the Thai stock exchange.

The group of managers paid 472 million baht (US$13.7 million) for just over 20 million shares, at a price of 23.50 baht per share, the statement said.

"The divestiture of Thai AirAsia's stake is part of Shin Corp's strategy to focus on the group's core telecoms and media businesses," a Shin Corp spokeswoman said. "Budget carrier Thai AirAsia is considered a non-core activity."

"It is expected that Thai AirAsia's management is considering whether to offer to buy more shares from Sittichai," she said.

Shin Corp has been under Temasek's control since Thaksin's family sold its stake in the telecoms giant in January last year for US$1.9 billion in a tax-free deal that set off public outrage against the former prime minister.

The outrage snowballed into months-long street protests against Thaksin, who was ousted by the military last September. Since then he has remained in exile.

Analysts said Shin Corp's decision to sell its Thai AirAsia shares was mainly motivated by the political pressure brought to bear on Temasek.

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