Seven firms suspected of using local nominees
Seven companies in Pattaya are suspected of breaching the Foreign Business Act (FBA) by having Thai nominees hold majority stakes, the Commerce Ministry's Business Development Department claims.
Those firms will soon face an in-depth probe by the Department of Special Investigation (DSI).
Pongpun Gearaviriyapun, director-general of the department, said two of the seven companies were in tourism-related businesses.
She said that in cooperation with the DSI and Tourism and Sports Ministry, her agency investigated 43 suspect firms in Chon Buri province, and the probe determined that seven in Pattaya were highly likely to have breached the FBA.
As part of the investigation, the Business Development Department has asked the suspect companies’ shareholders to speak to the agency’s legal officers. The department will also question the companies’ directors and examine their documentation. If any have committed offences, their cases will be forwarded for prosecution.
If found to be breaching the FBA, foreigners and Thai nominees can be subject to fines of Bt100,000 to Bt1 million and/or three years in prison.
In cooperation with the Tourism Department and the DSI, the Business Development Department this year is closely scrutinising the travel industry, and other businesses listed in Annex III of the FBA. That annex protects certain businesses in which Thais are deemed not ready to compete directly with foreigners.
The investigation has already found one travel agency in Bangkok in likely breach of the FBA. The probe is also targeting Samui, Hua Hin, Phuket and Chiang Mai.
Pongpun said that although it is stringently examining companies’ share structures, the department would relax some regulations, unlocking some businesses such as banking and insurance from Annex III.
She said most firms conducted their business in accordance with the law. To create better understanding about the FBA, the department has sent legal teams to educate enterprises on how to do business transparently.
Under the Foreign Business Act of 1999, Thailand does not allow foreign interests to hold more than 50 per cent of some types of businesses, such as telecommunications, rice milling, property development, media and tourism services. However, some foreigners have retained de facto control of such businesses by using Thai nationals as nominees.
