True Corp’s 3G network deal with state-owned CAT Telecom has been found to have been tainted with irregularities which could result in the 6 billion baht agreement being scrapped, the Information and Communication Technology Ministry says.
Anudith: Final decision in two days
But ICT Minister Anudith Nakornthap refused to state clearly yesterday whether the contract would be terminated, saying only that a final decision would be made in two days.
The True-CAT deal, signed during the Abhisit administration, gives True the right to the network previously used by Hong Kong telecom giant’s Hutchison’s (Hutch) operations in Thailand.
True in recent months has been aggressively marketing its 3G high-speed wireless services using the Hutch network while its major competitors _ Advanced Info Service (AIS) and Total Access Communication (Dtac) _ are still awaiting a decision on whether there will be a 3G licence auction this year.
The ICT singled out five points in its investigation of the True-CAT contract that raised questions about the legality and legitimacy of the deal.
If Gp Capt Anudith decides the contract should be revoked, he will have to submit his findings to the National Anti-Corruption Commission (NACC), which must then decide whether to petition the court for further action.
Gp Capt Anudith acknowledged that for now True can continue to operate 3G services under the deal until the court makes a final ruling, a process that could take years once all the appeals are exhausted.
True, meanwhile, has steadfastly denied any wrongdoing.
Athueck Asvanund, the company’s vice-chairman, said the ICT report did not identify any specific points in the contract that violated the law.
“The issues raised are political,” Mr Athueck charged.
Gp Capt Anudith said the ICT’s investigative committee found five points indicating irregularities in the CAT-True deal.
First, he said, the panel found there had been an indirect political instruction on April 7, 2010 during the term of former ICT minister Ranongruk Suwunchwee in the Thaksin Shinawatra administration for CAT to buy Hutch’s network in 25 provinces in the Central region from Hutchison CAT Wireless Multimedia, a joint venture between Hong Kong-based Hutchison and CAT Telecom, for 7.5 billion baht.
During the term of then ICT minister Juti Krairiksh under the Abhisit government, CAT had been instructed to reduce the price of the purchase to 4 billion baht with no details of how the figure had been calculated. This caused the CAT-Hutch deal to collapse. Hutch informed CAT on Nov 11, 2010 it would not sell the network to CAT.
The collapse of the CAT-Hutch deal enabled True and CAT to enter quickly into a deal under a new business model drawn up by True and the state firm.
CAT’s management rapidly signed six contracts with True on Jan 26, 2011, before receiving the green light from the CAT board.
The second irregularity found by the investigation committee was that CAT had bypassed the cabinet and the National Economic and Social Development Board (NESDB) in terminating the CDMA mobile service in 25 central provinces with Hutch and its affiliate to enter into the new deal with True.
The ICT had instructed CAT on Nov 29, 2010 to consult the Council of State on the issue but CAT had made the change without going through the cabinet and the NESDB, the minister said.
Third, it was found CAT had violated the ICT Ministry’s work procedures in going ahead with the deal with True. It was clearly recorded in the ministry’s emails that documents had been prepared and signed in advance and the paperwork which was processed through ICT executives carried no accompanying views of the agencies concerned before reaching the ICT minister.
Fourthly, Gp Capt Anudith said CAT had been required to consult the NESDB and the Council of State after it received the go-ahead for its request to enter into a business deal with True on Dec 28, 2010. However, CAT failed to comply with this directive, the minister said.
Lastly, Gp Anudith said CAT on April 28, 2011 asked the ICT to scrap the state enterprise’s original CDMA investment plan, and it switched to a new rental equipment agreement with True worth 12 billion baht.
He said the ICT’s investigative panel agreed CAT had no authority to enter into the new agreement. It could also be a violation of the 1992 Public-Private Joint Venture Act, which requires scrutiny of any public-private venture worth more than 1 billion baht.
“After over 120 days of investigation, we [our panel] can conclude the contract was intentionally made to avoid telecom-related laws,” Gp Capt Anudith said, adding the deal could affect the overall telecom industry structure and tarnish the state enterprise’s credibility.
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