The politics of sovereign wealth fund investment: the case of Temasek and Shin Corp.

Abstract

PurposeThe purpose of this paper is to highlight some of the political aspects of sovereign wealth fund investment.Design/methodology/approachThe paper employs a case study approach, bringing together various news articles and reports from around the world to build a picture of the key events surrounding the Temasek acquisition of Shin Corp.FindingsThe paper finds that the deal between Temasek and Shin Corp. was complex as foreign ownership is limited in Thailand. To add further controversy to the deal, the ultimate owner of Shin Corp. was former Thai Prime Minister Thaksin Shinawatra. Consequently, the controversy surrounding the deal and sensitive nature of the sale caused significant political turmoil in Thailand, and in some measure contributed to the military coup that finally ousted Thaksin Shinawatra.Research limitations/implicationsThe paper is a case study and as such is illustrative.Practical implicationsThe case highlights the potential fallout from sovereign wealth fund investment as a result of acquiring strategic assets.Originality/valueTo the best of the author's knowledge, the paper presents the first discussion of this important issue.