True, Dtac defend against allegations, say will fully comply with the law
True and Dtac have come out against a news article titled “AIS presses NBTC on mega merger”. According to the firms, the article stated that the merger may violate applicable laws and require explicit approval from the National Broadcasting and Telecommunication Commission.
The companies said they are in “full compliance with the law” and insisted that “AIS’s attempt to compare the deal with other 3BB acquisitions in not applicable”.
True and Dtac said they wish to clarify the issues as follows:
• Mergers in the Thai telecommunications industry have been consistently and continuously carried out. Since the 2018 NBTC notification on mergers (the “2018 NBTC Notification”) came into force, there have been at least 9 merger cases whereby NBTC had considered the mergers according to the 2018 NBTC Notification by issuing resolutions to acknowledge the notification of those mergers. Since then, has never resolved to ”approve”: or “disapprove” the merger cases and adopt the 2006 NBTC Notification in considering such 9 merger cases. We believe that NBTC will uphold its principles fairly and apply the same standards as previous merger cases without discrimination in considering the amalgamation of True and Dtac.
• It is inaccurate and misleading to refer to laws and regulations applicable to other industries (e.g. energy and banking sectors) to the mergers in the telecommunications sector which has caused confusion to the public because each regulated sector has a specific regulatory body and regulations to oversee mergers. Therefore, the regulations and practices in the telecommunications sector in which the private sector has complied with, have to apply in considering merger cases the telecommunications sector. For the telecommunications sector, NBTC has the power to impose specific measures in accordance with the 2018 NBTC Notification which is the specific regulation applying to mergers in the telecommunications sector. True and Dtac have fully complied with all procedures required in connection with the proposed amalgamation both as governed by the NBTC and the Public Limited Companies Act B.E. 2535.
• The amalgamation of True and Dtac and the acquisition of 3BB by AIS are incomparable because each of them is subject to different NBTC’s notifications
o The 2006 NBTC Notification regarding the acquisition of shares or business, and significant assets between telecommunication licensees (the “2016 NBTC Notification”)– the acquisition of 3BB by AIS is captured by this 2006 NBTC Notification as it refers to acquisition of shares or assets of another licensee, which requires prior approval from the NBTC.
o With respect to the amalgamation between True and dtac, such amalgamation has to be considered in accordance with the 2018 NBTC Notification which specifically regulates the amalgamation of telecommunication licensees or their controlling persons. The 2018 NBTC Notification repealed the 2010 NBTC Notification. Therefore, referring to the 2010 NBTC Notification as the regulation applying to mergers creates confusion because 2010 NBTC Notification is no longer in effect.
• With respect to Somchai, AIS Executive’s comment in The Bangkok Post questioning whether the foreign shareholders of True and dtac have an understanding of Thai laws and regulations, True and dtac reaffirm that the two companies and their major shareholders have undertaken their businesses in strict adherence to corporate governance principles and ethical business practice, including treating business partners and competitors with respect, adhering to the pillars of fair competition, and complying with relevant laws and regulations in all jurisdictions in which they invest and operate. With respect to this amalgamation, the parties have thoroughly considered all applicable Thai laws and regulations to ensure full compliance with all relevant procedures.
• Linklaters (Thailand) Co., Ltd. and Allen and Overy (Thailand) Co., Ltd., legal counsels to True Corporation Public Company Limited and Total Access Communication Public Company Limited respectively, have provided legal view to True and dtac regarding the amalgamation between True and dtac as follows:
o “Based on the NBTC’s practice in considering the amalgamation and merger and acquisition cases in the past, after the 2018 NBTC Notification came into force since 20 January 2018, there were at least 9 merger cases where merging parties notified the NBTC of their mergers in accordance with the 2018 NBTC Notification. In all those cases, the NBTC had resolutions to acknowledge the merger notifications without issuing an order to “approve” such merger cases and the NBTC’s consideration of such merger cases did not base on the 2006 NBTC Notification.”
o “Even though NBTC does not have the power y to approve or disapprove the amalgamation, it has power to regulate the amalgamation according to Clause 12 of the 2018 NBTC Notification to impose specific conditions or measures to the business operators with significant market power in the telecommunications market, in order to prevent damage to the public interests.”
• True and dtac reiterate that True and dtac have followed all required procedures, including having obtained approvals from the Board of Directors and shareholders of True and dtac and the management of True and dtac having carried out all the required steps. We are confident that the new tech company arising from this amalgamation will deliver greater benefits and values to the Thai consumers, businesses, society, and support the country’s sustainable development going forward. The new tech company will enable Thailand to take advantage of the perfect storm of new technologies such as artificial intelligence, 5G, Internet of Things and deliver new products and services through partnerships with global platform companies. Thailand needs two strong market players, not one strong and 2-3 weak players, which does not promote effective competition.
