Tesco Lotus : journalists want to investigate compliance with Foreign Business Act

Tesco Lotus went too far ? After libel suits against 2 journalists and a politician with insane claims from 100 millions THB to 1,1 billion (!)… there could be a serious backfire for the supermarkets operator…

Consider this :

The Thai Journalists Association (TJA) will play a major role in investigating the business operations of Tesco Lotus and its Thai operator, Ek-Chai Distribution Systems (Thailand).

The move is aimed at determining whether the operations comply with the Foreign Business Act (FBA).

The decision was announced yesterday after discussions about Tesco Lotus’s libel suits against Krungthep Turakij senior editor Nongnart Harnvilai, Krungthep Turakij columnist Kamol Kamoltrakul and Jit Siratranont, a former MP who is now vice general secretary of the Thai Chamber of Commerce.” (Nation)

To fully understand the threat… you need to read my special dossier about Foreign Business Act…

According to this law, a company owned by foreigners (more than 50 % of shares) can’t operate a retail business (List 3 of the FBA, unless a special licence is asked for).

But Ek-Chai Distribution Systems is a thai company. It means that foreign shareholders (if there are any, I don’t know) have less than the majority (otherwise, the company would be labelled as “foreign”, and then the FBA’s provisions would apply… do you follow ? 😉 )

In my dossier, I say that (from my point of view) only a fool would accept to invest, to put large amount of money… in a company that he doesn’t control. Again from my point of view, it’s a basic principle of business (however, there are exceptions of course).

The thai journalists want now to investigate this issue, in a kind of retaliation.

I think we should fully support such move. A very, very powerfull company that tries apparently to impress individuals, and especially journalists, by threatening them with label suits linked to insane amounts of money… doesn’t deserve any respect.

Tesco Lotus has been doing a great job in Thailand. The people, obviously, like to shop in those supermarkets (Carrefour too). So the company should be able to keep its nerves and must accept that some people do not agree, or are against its expansion. Where is the problem ?

With these libel suits the company appears… weak… and afraid of something, or willing to hide something. In Asia, it’s always bad to appear weak…

Anyway. On the other hand, we can think that such investigation will lead… nowhere.

Thailand is a country where the police and several official agencies… are still unable to say, yes or no, if nominees were used in the Shin Deal (The Deal of the Century, january 2006, when Thaksin sold his group to Temasek). 😉

I should add that the current issue is even hotter and sensitive, because supermarkets operators are under fire too with the… Retail Law (basically, lot of small shops owners are complaining about the expension of large supermarkets in Thailand. The previous government tried to reactivate a new Retail Law… without success).

So the situation is getting… rather complicated. 😉 Like always in Thailand.

[my previous articles about the Retail Law, here, here and there]

2 Responses to “Tesco Lotus : journalists want to investigate compliance with Foreign Business Act”


  1. 1 fall 23 April 2008 at 4:51 am

    Where the frek is our beloved senator, Rosana now?
    Too scare to do anything that actually mean something?

  2. 2 thaicrisis 23 April 2008 at 5:06 am

    Fall, I think we need to explain who is Senator Rosana :

    http://www.bangkokpost.com/topstories/topstories.php?id=126504

    😉


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Thailand Crisis

Coup, Economic slowdown, Terror In the South... The situation is worsening in Thailand. Bumpy road like often before.

But this time, it's different.

The key to understand the present turmoil is the inevitable... succession of King Bhumibol.


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