US twist to Thaksin court case
https://teakdoor.com/images/imported/2008/08/11.jpg
Aug 2, 2008
US twist to Thaksin court case
By Peter J Brown
Thailand's Supreme Court decided this week to proceed with a criminal conflict-of-interest case against former Thai prime minister Thaksin Shinawatra over his role in approving a 4 billion baht (US$119 million) government-to-government loan made to Myanmar's military-run government to purchase satellite services sold by his family-owned communications business.
The trial, set to start on September 16, will examine Thaksin's formerly family-owned telecommunications company, Shin Corp, and its then 53% majority-owned subsidiary, Shin Satellite, and his alleged role in approving the loan by the state-controlled Export-Import Bank of Thailand to help improve Myanmar's primitive telecommunications infrastructure.
The Asset Examination Committee, which investigated the charge, claims the loan was extended at an unusually low interest rate and that the grace period for the loan was inexplicably extended from two to five years. Thaksin supervised the Ex-Im Bank at the time the loan was made and strenuously defended the decision to make the loan when criticized at the time in the local press.
The criminal case represents one of several now hanging over the former premier, his family and political and business allies. Thaksin's wife, Pojaman, was sentenced on Thursday to three years in prison on tax evasion charges related to a 1997 Shin Corp share transaction she made with her brother. Three other criminal corruption and abuse-of-power related cases against Thaksin, who was ousted in a 2006 military coup, are now in court.
The Thai Ex-Im Bank loan case, however, is notable for its international dimension, including a US government role in financing Shin Satellite's business activities. During Thaksin's five-year tenure, his family-owned Shin Satellite, now known as Thaicom and majority-owned by Singapore's Temasek Holdings, developed and in 2005 launched a US$350 million satellite known as iPStar, which now beams satellite broadband services throughout Southeast Asia, China and Australia.
Myanmar's government allowed the company to run trials of IPStar's ground stations in 2003, providing the company a live but closed environment to test the technology without heavy market scrutiny. A portion of the 2004 Thai Ex-Im Bank loan to Myanmar was allegedly used to purchase those same Shin Satellite iPStar satellite terminals and other services.
Although the upcoming criminal case is expected to examine the terms of the loan and how it was allegedly devised to provide maximum benefits to Thaksin's family-owned Shin Corp, the US State Department as well as the US Export-Import Bank will be nervously watching the proceedings. That's because American taxpayers effectively helped to finance iPStar's construction by a US company, Space Systems/Loral, through roughly $190 million in US Ex-Im Bank loan guarantees. (The French government, which has also recently been a strong critic of Myanmar's regime, also provided loan guarantees for the launch services for the satellite.)
At the same time the Thai Ex-Im Bank approved its controversial loan to Myanmar in 2004, the actual satellite was still sitting on the ground in the US awaiting delivery by Loral to a launch facility in South America. Because of the Myanmar government's abysmal human rights record, US companies are legally forbidden by US government trade and investment sanctions from doing with the country any business that was not established before 1997.
Questionable US role
In this particular case, and for unknown reasons, the US State Department and the US Ex-Im Bank stood by silently as the controversial iPStar transaction with Myanmar unfolded. This is much more than an awkward omission: the iPStar project was a high-profile affair from the start. Among other things the head of the US Ex-Im Bank traveled to London in 2003 to accept an award related to the project, which Shin Satellite executives at the time promised would revolutionize the global satellite business through greater transmission efficiency.
Powerful members of the US Congress had a heated exchange with the US Ex-IM Bank in 2002 over how the satellite project was taking shape, although not over the possibility that its mission would benefit Myanmar's junta. As the court case against Thaksin unfolds, the US Congress and even the White House, which in recent years has been strongly critical of Myanmar's military regime, including President George W Bush's own reference to the country as an "outpost of tyranny", will be left to answer how this transaction apparently slipped under their radar screens.
Days before the Thai Supreme Court announced its decision to hear the case, the US House of Representatives voted to freeze certain junta members' assets and ban the importation of all Myanmar-sourced jade and rubies to the US. American gem dealers had previously avoided trade sanctions by importing Myanmar gems from second countries which processed or in other ways added value to the raw stones.
The new measures are the latest of a wide range of trade and investment sanctions imposed by the US government against Myanmar. In 2007, Bush extended for another year the trade sanctions that were first signed by president Bill Clinton in 1997. Add to that list the Burmese Freedom and Democracy Act of 2003, and another executive order on new investments in Myanmar signed by Bush that same year. The Bush administration's tough message to Myanmar's generals has been clear, while the gap dividing the US's and Thailand's policy towards the regime has grown ever larger.
Indeed Shin Satellite and its iPStar satellite continue to make steady inroads into Myanmar. In early 2008, Myanmar Posts and Telecommunications announced that Thaicom had expanded its business ties through the signing of a pair of new capacity contracts. Thailand's new Thaksin-aligned government, led by prime minister Samak Sundaravej, announced earlier this year that the remaining portion of the 2004 Thai Ex-Im Bank loan would be handed over to Myanmar's generals, despite the political controversy surrounding the loan.
The bottom line however is that Thaksin and his family are not the only ones feeling the legal heat. While the US State Department looked on, the US Ex-Im Bank wrote checks that effectively extended badly needed satellite services into Myanmar - and in apparent violation of the sanctions Washington has long imposed against the military regime.
Now Myanmar's junta is likely using US-funded wireless broadband technology to perpetuate its repressive policies and harassment of pro-democracy groups. Not only does the oversight represent a shameful stain on US government accountability, it also sets back the broader cause of promoting human rights and democracy in military-run Myanmar.
Peter J Brown writes frequently about satellite industry trends and developments in Asia.
atimes.com
