Nine firms face legal action for alleged breaches of FBA
NINE COMPANIES in Chon Buri, Surat Thani and Bangkok will soon face legal action instigated by the Business Development Department after being suspected of breaching the Foreign Business Act (FBA) by having Thai nominees hold majority stakes on behalf of
The companies in question are involved in tourism, restaurant, property and agency businesses, which are FBA-protected sectors in which Thais must hold majority shares in operators.
Pongpun Gearaviriyapun, director-general of the department, yesterday said that those involved in firms found to have breached the FBA would be subject to fines of Bt100,000 to Bt1 million and/or three years in prison.
The nine companies have been extensively investigated by the department this year in cooperation with the Department of Special Investigation (DSI) and the Tourism Ministry, she said.
In total, Pongpun’s department investigated 6,065 companies that have foreign shareholders, with the number initially whittled down to 276 suspected of breaching the FBA, after the agencies examined documents and questioned company directors and witnesses.
There has to date been further in-depth investigation of 155 of the 276 firms, resulting in nine of them still suspected of contravening the act, she explained, adding that they would face legal action soon. The department has also examined movements in the bank-account balances of the nine businesses, as well as their funding sources.
Pongpun said her department would continue to investigate possible nominee cases to prevent foreign enterprises skirting the law to undertake businesses legally reserved for Thais.
It is continuing to investigate the remaining 121 companies suspected of FBA breaches and should be able to conclude the process by the end of July, she said.
Under the Foreign Business Act of 1999, Thailand does not allow foreign interests to hold more than 50 per cent of some types of business, 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.
Meanwhile, the number of newly registered companies in the Kingdom increased considerably in the first four months of the year, indicating that the business sector remains confident that the economy will continue to grow, the Business Development Department reported yesterday. From January to April, the number of new companies rose 11 per cent year on year to 21,873.
