Six committee members of the National Legislative Assembly (NLA) will today launch a last-ditch attempt to amend the Foreign Business Act by adding a "management control" clause to prevent foreign investors from using nominees to dominate the management of Thai firms.
Viriya Namsiripongpan, a member of the NLA committee, said the government should consider adding controls on the management of foreign shareholders in the amended act as it would create a stronger regulation to prevent the nominee problem in the future.
"It is crucial that the act should extend to control of shares and voting rights as it will ensure that foreigners will have limited authority to control businesses that are protected by the law," he said.
Today's proposal will concentrate on defining alien companies in Article 4 through management control.
Other committee members include Somchai Sakulsurarat, Kamnoon Sitthisamarn, Bodin Asavanich, and Parn Peungsujaritkul.
The NLA today will vote whether to accept the draft amendment of the Foreign Business Act, and decide whether to accept the proposal for expanded control of management.
The Foreign Business Act is subject to amendment in the wake of the controversial takeover of Shin Corporation by Singapore's Temasek. Thai lawyers now want to make the issue of foreign ownership clear once and for all. The legal amendment will bar foreign investors from using nominees and curb their control of shares, voting rights and management in companies doing business in sensitive sectors.
Viriya said the government must also consider increasing the penalties for lawyers who advise their foreign clients on how to circumvent the foreign ownership law.
So far, the final version approved by the scrutinising committee states that the amended act will extend control of shareholding to voting rights. That is, a company registered in Thailand with foreign shareholders would have to limit the shares or voting rights of foreigners to below 50 per cent. The government has not extended controls on management as it would be too stringent and too difficult to inspect.
Although the government said it would be difficult to control management, Viriya said the government should develop its inspection efficiency along the lines of the Revenue Department's investigations of revenue payment violators.
He said that the Japanese government also restricts foreigners through management control, which is in imitation of European laws.
NLA member Pattarak Khumphitak said that companies with more than 49 per cent of the shares owned by foreigners but with special management rights over Thai shareholders should be defined as "foreign management controlled".
This would make the company a "foreign" business and therefore required to be registered by the Commerce Ministry.
He said that the amendment of the draft act would be meaningless unless the government imposed controls on management. Foreigners would seek other ways to control companies protected by law by increasing their management operations.
Source : The Nation
Last effort to end foreign nominees
Last effort to end foreign nominees
Who is the happier man, he who has braved the storm of life and lived or he who has stayed securely on shore and merely existed? - Hunter S Thompson
BANGKOK, Aug 8 (TNA) – The government has withdrawn Wednesday the controversial Foreign Business Bill from the final stretch of the law-making process to incorporate more amendments suggested by law-makers.
The National Legislative Assembly, the law-making body, met for the third reading of the draft. Following objections from the minority wing, Commerce Minister Krirkkrai Jirapaet decided to withdraw the bill from the process in order to prevent it from being killed.
A group of NLA members proposed amendments to the definition of “foreignâ€
The National Legislative Assembly, the law-making body, met for the third reading of the draft. Following objections from the minority wing, Commerce Minister Krirkkrai Jirapaet decided to withdraw the bill from the process in order to prevent it from being killed.
A group of NLA members proposed amendments to the definition of “foreignâ€
A Democratic Party leader said it very well in today's Post.
"Who are they doing this for? The benefit of the people, or for their own vested interests...."
Cut the legs out from under the foreign companies, and you cut the legs OFF the Thai blue collar working population. Do that and you'll see Thaksin's dog winning the the PM post.
However good intentioned this coup was in the beginning, those appointed now slide back into the "me" thinking it seems. All conservative, most seem to be xenophobic, and all seem to be worrying about future boardroom power instead of the country's real economy.
Thaksin was a crook, as was his chief advisor, the dragon lady, his wife. Regardless, he had some good ideas for this economy and they were working. Sift out the graft and corruption and they would have worked very, very well IMHO.
At this moment, after all these months, I don't see any difference at all between the motives of the military appointed legislature and the previous legislature. The current is once again vesting itself in " their future" after they are gone.
Stop the world, I want to get off. Pete
"Who are they doing this for? The benefit of the people, or for their own vested interests...."
Cut the legs out from under the foreign companies, and you cut the legs OFF the Thai blue collar working population. Do that and you'll see Thaksin's dog winning the the PM post.
However good intentioned this coup was in the beginning, those appointed now slide back into the "me" thinking it seems. All conservative, most seem to be xenophobic, and all seem to be worrying about future boardroom power instead of the country's real economy.
Thaksin was a crook, as was his chief advisor, the dragon lady, his wife. Regardless, he had some good ideas for this economy and they were working. Sift out the graft and corruption and they would have worked very, very well IMHO.
At this moment, after all these months, I don't see any difference at all between the motives of the military appointed legislature and the previous legislature. The current is once again vesting itself in " their future" after they are gone.
Stop the world, I want to get off. Pete
Governments are instituted among Men, deriving their just powers from the consent of the governed. Source
(Bangkok)-Former deputy premier MR Pridiyathorn Deva-kula yesterday urged the interim government to leave the controversial amendment to the Foreign Business Act on the backburner, saying the elected government expected in a few months should process this crucial piece of legislation.
Another suggestion would be to slash the services protected from foreigners, as listed in Appendix 3, to zero or near zero in order to minimise strains on the country's investment climate, he told a seminar organised by Sasin Graduate School, the Commerce Ministry and Nation Multimedia Group.
On August 8, the National Legislative Assembly voted 76-64 to adopt a new version of the amendment which Pridiyathorn said was "far too strict" towards foreign investment.
The original version drafted by the government, which was rejected by the NLA, was only aimed at ensuring shareholder control of businesses set up here and had nothing to do with management control, he said.
"The NLA twisted the draft in a bad direction," he said, adding that this only further complicated the issue while dampening foreign investment sentiment.
According to the NLA's August 8 decision, the Com-merce Ministry would revise the draft by expanding the definition of foreigners in the FBA, which would make the law even more restrictive towards inward investment.
Kanissorn Navanugraha, director-general of the Business Development Department, also said the revision as required by the NLA might not be finished before the Surayud government steps down following the general election scheduled at the end of the year.
Deepak Mittal, vice chairman of the Joint Foreign Chambers of Commerce in Thailand, told the seminar that the FBA debate had created a bad impression among existing and new foreign investors.
Mittal, a top executive of Aditya Birla Group of India, which has invested substantially here over the past three decades, warned Thailand to be cautious because there was fierce competition for foreign projects in this region. Vietnam, Malaysia, India and China are the key rivals.
The FBA as it stands was fine with him, with no need for adjustments, although it was abused in some recent high-profile cases.
"This should not disturb the whole investment atmosphere," he said, adding that Thailand would be better off just enforcing the existing law strictly.
The whole FBA issue should be left as it is for now and the next government should be allowed to make the final decision, he said.
Vincent Milton, managing director of Fitch Ratings Thailand, said foreign direct investment (FDI) had been falling in Thailand and other Asean countries because China and India have become more attractive.
Thailand had raised several uncertainties for FDI, such as the FBA amendment, the September 19 coup, compulsory drug licensing and the 30-per-cent capital reserve requirement, he said.
Pridiyathorn defended the government's version of the FBA as reasonable since most investments would not be subject to the proposed law.
More than 1,000 companies have been set up to skirt the law by using "voting rights" to own real estate here, he said.
The trick is to set up firms with 49-per-cent foreign shareholding so that they are regarded as Thai firms eligible to buy and hold property, but in fact these entities are majority-owned by foreigners using Thai nominees as shareholders, he said.
Nophakhun
Limsamarnphun,
Petchanet Pratruangkrai
The Nation
Another suggestion would be to slash the services protected from foreigners, as listed in Appendix 3, to zero or near zero in order to minimise strains on the country's investment climate, he told a seminar organised by Sasin Graduate School, the Commerce Ministry and Nation Multimedia Group.
On August 8, the National Legislative Assembly voted 76-64 to adopt a new version of the amendment which Pridiyathorn said was "far too strict" towards foreign investment.
The original version drafted by the government, which was rejected by the NLA, was only aimed at ensuring shareholder control of businesses set up here and had nothing to do with management control, he said.
"The NLA twisted the draft in a bad direction," he said, adding that this only further complicated the issue while dampening foreign investment sentiment.
According to the NLA's August 8 decision, the Com-merce Ministry would revise the draft by expanding the definition of foreigners in the FBA, which would make the law even more restrictive towards inward investment.
Kanissorn Navanugraha, director-general of the Business Development Department, also said the revision as required by the NLA might not be finished before the Surayud government steps down following the general election scheduled at the end of the year.
Deepak Mittal, vice chairman of the Joint Foreign Chambers of Commerce in Thailand, told the seminar that the FBA debate had created a bad impression among existing and new foreign investors.
Mittal, a top executive of Aditya Birla Group of India, which has invested substantially here over the past three decades, warned Thailand to be cautious because there was fierce competition for foreign projects in this region. Vietnam, Malaysia, India and China are the key rivals.
The FBA as it stands was fine with him, with no need for adjustments, although it was abused in some recent high-profile cases.
"This should not disturb the whole investment atmosphere," he said, adding that Thailand would be better off just enforcing the existing law strictly.
The whole FBA issue should be left as it is for now and the next government should be allowed to make the final decision, he said.
Vincent Milton, managing director of Fitch Ratings Thailand, said foreign direct investment (FDI) had been falling in Thailand and other Asean countries because China and India have become more attractive.
Thailand had raised several uncertainties for FDI, such as the FBA amendment, the September 19 coup, compulsory drug licensing and the 30-per-cent capital reserve requirement, he said.
Pridiyathorn defended the government's version of the FBA as reasonable since most investments would not be subject to the proposed law.
More than 1,000 companies have been set up to skirt the law by using "voting rights" to own real estate here, he said.
The trick is to set up firms with 49-per-cent foreign shareholding so that they are regarded as Thai firms eligible to buy and hold property, but in fact these entities are majority-owned by foreigners using Thai nominees as shareholders, he said.
Nophakhun
Limsamarnphun,
Petchanet Pratruangkrai
The Nation