Minister ponders nominee amnesty
Temasek would also be let off the hook
POST REPORTERS
The Commerce Ministry could offer an amnesty to foreign joint ventures in violation of the Foreign Business Act in order to resolve problems with the use of nominees, according to Commerce Minister Krirk-krai Jirapaet.
Krik-Krai: "What is necessary is necessary. "
Authorities plan to review the Foreign Business Act and other laws to close loopholes and modernise regulations. An amnesty, meanwhile, would give joint ventures that currently use nominee vehicles time to restructure their indirect holdings to fully comply with the law.
"If it is necessary to [offer amnesties] due to economic reasons, and it does not violate the principle of law, then we will look at it," the newly appointed minister said yesterday in an interview with the Bangkok Post.
Such an amnesty would include the telecom giant Shin Corp, which is the subject of a criminal investigation over whether Singapore's Temasek Holdings used nominee vehicles to violate the 49% foreign shareholding limit, he said.
"What is necessary is necessary, and we have to abide by the principles, and if that means that we have to give amnesty to [Temasek] then we'll have to do it, because we have to treat them in the same manner as everybody else," said Mr Krirk-krai, who ranked the nominee and Temasek issues as his fourth priority after farm products, retailing, and exports.
Temasek controls 42% of Shin directly through wholly owned Aspen Holdings, and also has an indirect stake through Cedar Holdings, which holds another 54.5% of Shin.
The Business Development Department earlier submitted a report to police investigators that Shin violated the 49% foreign limit due to the use of illegal nominees, an offence punishable by jail, fines or even dissolution of the business.
Mr Krirk-krai said it was time for the nation to move on and try to differentiate between political and economic problems.
"If there's something that is not right about the structure, then we'll adjust it, but if we try to mix politics and business together then we will be stuck, and in this case the biggest loser will be the economy and the investors' confidence in the Thai economy," he said.
Mr Krirk-krai added that the ministry under his guidance would look to amend various laws to suit the needs of the investors and the free-market economy.
"On the issue of nominees, we have to look at ways to sort it out. Once we have the laws ready, then we'll discuss it. For example, if the 49% gives way for nominees, and your aim is to seek help in development of the country, especially in sectors in which we cannot compete, then why don't you give them 51%?" he asked.
While companies that have nominee structures would be allowed to maintain the status quo, those set up in the future would have to follow any new regulations that would be put in place.
The market has welcomed the minister's views, saying they were a positive step for the country and would help restore lost confidence.
"If you ask me, this is great news as deals have remained low as foreign investors have shied away from investing in Thailand," said an investment banker at one of Thailand's leading brokerages.
Fund managers and lawyers also said Mr Krirk-krai's proposal was positive and that funds would likely start to flow in the future once policies were clearer.
"This is definitely very positive for the country," said Lance Depew, investment manager at Quest Capital, which manages $240 million in assets in Thailand.
The legal changes would bring the government's policy in line with reality as in the past the governments had turned a blind eye to the shareholding structures of companies, he added.
"The devil would be in the details, although I must say I support it wholeheartedly if the government can do it," added Supavud Saicheua, a managing director with Phatra Securities.
"It will be a very positive step for Thailand if the government can set the right framework for the future."
It is estimated that 13,000 companies have nominee structures and fears of consequences arising from the Shin-Temasek investigations have prompted many investors to put decisions on hold.
Source Bangkokpost 19 Oct 06
Nominee shareholder amnesty?
Seems a positive move to me, clearly they want foreign investment and if they're prepared to amend their rules to accomodate us, then fair play to them.
Thailand is a poor'ish, third world'ish country and foreign investment can only help their development. Why on earth would they try to stifle it.
Burger
Thailand is a poor'ish, third world'ish country and foreign investment can only help their development. Why on earth would they try to stifle it.
Burger
Because they're idiots.Burger wrote:Seems a positive move to me, clearly they want foreign investment and if they're prepared to amend their rules to accomodate us, then fair play to them.
Thailand is a poor'ish, third world'ish country and foreign investment can only help their development. Why on earth would they try to stifle it.
Burger
How's that?