DTAC, Thailand's second-largest telecom operator, faces potential questions over its shareholding structure and whether foreign business laws have been violated as authorities expand an investigation into the widespread use of nominee companies by foreign investors to bypass shareholding restrictions.
Norway's Telenor announced in October 2005 that it was taking effective control of United Communication Industry (Ucom) and mobile affiliate Total Access Communications (TAC) in a buyout of shares held by Ucom's founders, the Bencharongkul family.
The deal was carefully structured to avoid violating the 49% foreign limit, with Telenor Asia's direct holdings limited to 24.85% in Ucom and 29.94% in TAC.
But indirect holdings were much higher, with Telenor effectively controlling 86% of Ucom and 70.6% of TAC, according to Telenor's own financial statements.
Thai Telco, which controls 58.6 % of Ucom, was the primary shareholding vehicle for Telenor.
Ucom is now essentially a shell company for Telenor, with no significant ongoing operations following the divestment of its data-transmission and broadband operations to the Bencharongkul family's Benchachinda Holdings last year. Ucom's core asset is its 41% shareholding in TAC, which Telenor is expected to eventually delist from the Stock Exchange of Thailand.
Sigve Brekke, the chief executive of DTAC, declined to comment directly about the company's shareholding structure.