Founder Boonchai's family boosts stake
Total Access Communication (DTAC) founder Boonchai Bencharongkul and his family appear to have raised their stake in DTAC as part of the second-largest cellular operator's efforts to address concerns about foreign dominance in the company as it prepares
In a filing to the Office of the Securities and Exchange Com-|mission on July 20, DTAC outlined a new shareholding structure in its shareholder Thai Telco Holdings. BCTN Holding now owns 51 per cent in Thai Telco, while Telenor South East Asia owns 49 per cent. Telenor is DTAC’s Norwegian strategic partner.
BCTN Holding is 51-per-cent-owned by BCTN Innovation, while Telenor South East owns the rest. BCTN Innovation is 51-per-cent-owned by BCH Holding – founded in April with three directors, Boonchai and his family members Vichai and Somchai – while Telenor South East owns 49 per cent.
Boonchai, who also serves as DTAC chairman, could not be reached for comment, while Sigve Brekke, head of Telenor Asia and a DTAC board member, declined to comment on the matter.
A telecom analyst said that based on DTAC’s share price, this deal could be worth Bt17 billion. However, the actual value could not be worked out as Thai Telco is not a listed firm. DTAC’s share price closed at Bt78.50 last Friday, down 0.32 per cent.
Telenor Asia, a unit of Norway’s Telenor, owns 42.61 per cent in DTAC, while Thai Telco owns 22.85 per cent. Previously, Telenor owned 49 per cent in Thai Telco, while Borelo owned 31.2 per cent and Boonchai owned 9.9 per cent.
The Bencharongkul family, which founded United Communication Industry Plc (Ucom), parent of DTAC, sold its combined 40 per cent controlling stake worth Bt9.2 billion in Ucom to Thai Telco in 2005, paving the way for Telenor to assume greater control of DTAC.
The National Broadcasting and Telecommunications Commission (NBTC) will hold bidding on the 2.1GHz spectrum in October. To be eligible, bidders must be Thai entities and comply with related Thai law, including NBTC’s regulations preventing foreign dominance of the telecom sector.
The telecom industry source added that Telenor is removing any possible risks and uncertainties that could affect DTAC’s plan to bid for the spectrum.
An NBTC source said some parties might seek to mount a legal challenge against the doubtful legal status of bid winners after the auction. Many attendants at the NBTC public hearing last week on the draft spectrum-licensing terms and conditions urged the watchdog to make sure that all bidders comply with related law and regulations.
The Commerce Ministry’s Department of Business Develop-ment in July last year passed the results of its preliminary probe into whether DTAC was breaching the Foreign Business Act (FBA) on to police for further investigation. The department has taken the view that although its probe indicated that all financial support for Thai investors in DTAC appeared to come from foreigners, the department had no documentation or legal evidence to prove the allegation that the foreign-business law had been violated.
The DBD’s probe followed complaints from DTAC’s rival, TrueMove, to many state agencies that DTAC was allegedly a foreign entity doing business in Thailand by circumventing the foreign-business law, which caps foreign shareholdings in telecom operators at 49.99 per cent.
The department will next month announce six new guidelines for inspecting 27,000 companies in Thailand that are at risk of breaching the FBA.
It aims to prevent foreigners, and nominees of offshore entities, operating businesses forbidden under the FBA. DTAC and Advanced Info Service each have a foreign strategic partner. True Corp is the only telecom operator without foreign strategic partnership.
The Department of Special Investigation (DSI) has also probed the legal status of InTouch, AIS’ parent, to see whether it is restricted by law from conducting telecom business.
