FBA : 40,000 companies with foreign shareholdings will be investigated

Knock ! Knock ! Who is back ? The Foreign Business Act of course !

This famous Thai Saga (between the Benny Hill Show and Monthy Python) continues to excite the politicians. It’s a never ending story. Here is the latest episode.

The department will stringently investigate some 40,000 companies that have foreign shareholdings of from 40-49 per cent for possible violations of the FBA.

The department will randomly investigate them to make sure that no foreign investors have taken advantage of any loophole in the act to hold more than 49 per cent in firms on the protected list.

Asked about an investigation of whether 12 companies had breached the act as alleged in complaints to the ministry since 2006 , Kanissorn said some cases had been passed to the police for withholding evidence.

Twelve firms under investigation are UCOM, BoleroTak Wu Holdings, Telenor, Hutchison CAT Wireless Multimedia, Asia Aviation (Thai Air Asia), Thai Sky Airline, Cen Car (Carrefour), EkChai Distribution System (TescoLotus), Siam City Cement, DHL Logistics (Thailand), event organiser Izumi Zenkosha (Thailand), and real estate agent Burapa Lumpini Land. (Nation)

The Junta started in 2006 an inane amendement process of the law (read my special dossier here) before to back off. Humiliated.

This story of the “40 000 companies to be investigated” is not new.

In september 2007, they’ve made a similar announcement.

โ€œThe Business Development Department is in the process of inspecting as many as 40,000 companies to see if they have used nominee structures to hold shares for foreign investors _ a practice prohibited by the Foreign Business Act. (read my article)

It came just after the decision from the government to withdraw the amendement… Face saving exercise I asked at that time.

So one year later they start again, even though it’s a new government. Who is going to believe them ?

That’s the problem with the Thai Dramas. Eventually, they lost all credibility… ๐Ÿ˜‰

As to repeat that Carrefour, Lotus and DHL are still under investigation (since 2006 !)… it’s of course laughable…

They just can’t attack 3 MAJOR international companies (even though in Thailand they use local… “partners”).

The thai government should understand this, and stop making ridicule of itself.

It becomes… embarrasing.

6 Responses to “FBA : 40,000 companies with foreign shareholdings will be investigated”


  1. 1 Marvo 30 August 2008 at 1:46 pm

    On 25th August 2008, in “The Nation”…
    Commerce Minister Chaiya Sasomsap last week said he would soon ask the Cabinet to approve the setting up of a committee to consider amendment of the FBA, as a way to increase confidence among foreign investors amid the continuing political uncertainty.

    and on 30th August we get:

    “The department will stringently investigate some 40,000 companies that have foreign shareholdings of from 40-49 per cent for possible violations of the FBA.”

    Nice work guys!

  2. 2 ThaiCrisis 30 August 2008 at 2:23 pm

    ๐Ÿ˜‰
    Indeed. Anyway I seriously doubt that anyone is listening to Chaiya (new commerce minister, after being health minister for a few months…). And currently the gvt is propably having other urgent priorities : its own survival.

    So basically, I’ve decided to report on this “news” but honestly I think it’s more a show, some blabla, than something serious.

  3. 3 fall 30 August 2008 at 3:00 pm

    I am just dying to see the Revenue Department start apply Mr. T standard on share transaction and tax base to ALL same criteria trader in SET. To think of all the potential lost tax revenue…
    That should be happening soon, with PAD and Sen. Rosana crying for it, right?

  4. 4 ThaiCrisis 30 August 2008 at 3:25 pm

    Hum… The Revenue Department is such a black box… The latest stories about the fight against SCB (bank) and the RD regarding some 12 billions THB of frozen money (of Thaksin’s children) and taxes to be paid… are rather strange.

    I mean… everything could happen, right ? ๐Ÿ˜‰

  5. 5 fall 31 August 2008 at 4:19 am

    The 12 billions case is interest, I wish the media and lawyer talk more about it. It could point to a loop hole in the system that should be fix.

    Can the RD count the frozen amount in contest as potential tax? Or does frozen order override and RD should find from somewhere else? What is the SOP of frozen money in regard?

  6. 6 Anon 1 September 2008 at 8:17 am

    Seriously, why can’t they ignore the other 40,000 companies?

    I mean, nobody is going to give a damn if they only enforce the law in one instance (Shincorp-Temasek) and ignore every other instance – it’s not as if anybody has any expectations of the rule of law in Thailand.


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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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