Phuket firms face DSI probe over alleged use of nominees
Four Phuket companies will soon face an in-depth probe by the Department of Special Investigation for possibly circumventing the Foreign Business Act by letting Thai nominees hold a majority stake.
The Commerce Ministry will next check for such cases in Chiang Mai.
Pongpun Gearaviriyapun, director-general of the ministry’s Business Development Department, said last week that three companies were found operating in tourism and one in real estate. Foreigners are forbidden from owning more than 50 per cent of such companies.
In cooperation with the DSI and the Tourism Ministry, the department has investigated more than 80 suspect firms in Phuket province and determined that four firms were highly likely to have breached the law.
As part of the investigation, the department has asked those companies’ shareholders to speak to its legal officers.
The department will also question the companies’ directors and examine their records. If any have committed offences, their cases will be forwarded for prosecution.
Offenders, both foreigners and local nominees, could face a fine of Bt100,000-Bt1 million and/or three years in prison. If the company does not correct its shareholding structure, it will also be fined Bt10,000-50,000 a day until it conforms to the law.
The department has checked into Bangkok, Pattaya, Samui and Hua Hin and found more than 10 suspect nominee cases, which are now being examined under the legal process.
Working with the Tourism Ministry and the DSI, the department is closely scrutinising the travel industry this year to prevent nominee cases, as they could affect national stability, the economy and society.
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 used Thai nationals as nominees to run such businesses.
The businesses listed in Appendix III of the FBA cover those in which Thais are not yet ready to compete with foreigners. Businesses protected for Thais include those in the retail and wholesale sectors.
Although it is stringently overseeing companies’ shareholding structure, the department suggests that enterprises register with the department legally, while any firm wanting to engage in a business related to tourism will also need to register and get a business licence from the Tourism Department.
This stringent measure is aimed at protecting travellers from getting scammed by unscrupulous enterprises.
