
Huge share sales during the past year have shifted effective control of two major Thai telecoms firms to Norway's Telenor and Singapore's Temasek Holdings.
Market observers now believe that Thailand's military-appointed interim government is more likely to follow the rules on foreign ownership of Thai firms.
The Thai government may ask Temasek to reduce its effective 96 percent stake in Thailand's Shin to below 49 percent in line with regulations, according to a report in local daily The Nation quoting an "unidentified government source".
Shin controls a mobile phone company, TV broadcasting, satellite communications and other interests in Thailand.
Temasek representatives told Thai media yesterday that they would not comment on "market rumours".
The increased scrutiny of foreign investments has apparently been fuelled by a furore over Temasek's takeover of Shin earlier this year, which used various intermediaries and holding companies to bypass a 49 percent limit on foreign control.
Shin Corp was founded by Thailand's deposed prime minister, Taksin Shinawatra, who still controlled the firm until its January sale for US$1.9 billion to Temasek.
The tax-free sale added to Shinawatra's unpopularity with urban and middle-class Thais, and provided further impetus for his removal in a non-violent military coup last month.
Temasek is closely linked to Singapore's president, who has the power of veto over chief executive and board member selections. Temasek's current chief executive is the president's wife.
The close connection to Singapore's government has increased concerns in Thailand that sensitive communications assets are passing into foreign control.
Following the unwelcome publicity, the Singaporean company has made efforts to better explain its operations to Thais, for example by providing a Thai language version of parts of its website.
If forced to reduce its holding in Shin Corp immediately, Temasek would face a huge loss as the current value of Shin shares is more than 40 percent below the purchase price.
According to "unnamed sources familiar with Temasek" quoted in the Bangkok Post today, Temasek will consider selling off its shares gradually over a three or four year period, on the condition that other foreign telecoms firms face similar treatment.
The furore over the politically-linked Shin buyout has focused new attention on an earlier telecoms sale, which had originally passed with little comment.
Norway's Telenor ASA took control of local mobile phone operator Total Access Communications last year in a deal that also involved the use of holding companies to evade Thailand's 49 percent limit on foreign ownership of certain companies.
In its most recent quarterly report, issued in July, Telenor acknowledged that it has an "economic stake" of 70.6 percent in the Thai firm, and that Thai regulators were looking at more restrictive foreign ownership rules.
The company's executives have since stated that the purchase was in compliance with Thai law.