FOREIGN BUSINESS ACT
Govt urged to consider an amnesty
Move is 'needed to restore confidence'
Academics believe the government should give an amnesty to all foreign-owned companies after the amended Foreign Business Act (FBA) is implemented to regain the confidence of foreign investors, which is declining amid the current political and economic situation.
Nonetheless, the academics also suggested the police speed up the legal process to prove quickly whether Kularb Kaew had violated the law prior to the enactment of the new foreign business law. The quick conclusion of the case would pave the way for clear policy direction on foreign business operations in Thailand, they said.
Speaking at a seminar yesterday on the FBA, Thitipan Chuerboonchai, dean of the Faculty of Law at Chulalongkorn University, urged the police to finalise the Kularb Kaew investigation quickly.
He also urged the Commerce Ministry to wrap up the investigation into allegations against other companies to see whether they had used nominees.
Amid eroding confidence among foreign investors, Thitipan said the government should provide the remedy by offering an amnesty to all foreign businesses.
"The amnesty could be the best solution to increase foreign-investor confidence. However, in the case of Kularb Kaew, which is a controversial issue, the government should conclude the
final case before completing the act amendment," he said.
The amendment of the FBA was largely a result of Singapore-based Temasek Holdings' takeover of Shin Corp. Kularb Kaew was accused of holding shares on behalf of Temasek to enable foreigners to hold shares above the legal limit.
The amended version of the law stipulates clearly the sectors where foreigners are not allowed to hold majority shares. The interim Cabinet approved the act amendment early this year.
Thitipan also urged the government to clarify the definition of nominee to avoid misunderstanding among foreign investors, who feared their businesses might be taken back by the Thai government.
Besides, Thitipan also urged the government to adopt a liberal approach. The government must decrease the list of businesses subject to protection under Annexes I, II, III as much as it could. This would not only create a better environment in the Kingdom, but also create a competitive environment for Thai businesses and force them to develop themselves as well as benefit consumers.
Additionally, he said the draft should control not only ownership in shares and voting rights but also the rights of the management process.
Skol Harnsuthivarin, secretary to the commerce minister, said: "It is quite difficult for the government to control all three levels. It's nearly impossible to verify the management process in every company."
He said the draft amendments were being considered by the Council of State before being proposed to the Cabinet for approval.
Kitti Tangjitrmaneesakda, deputy secretary-general of the Federation of Thai Industries (FTI), said the federation agreed with the Commerce Ministry about amending the act.
He believed it would not affect foreign investment in the industrial sector, particularly in huge projects, because projects approved by the Board of Investment will be exempted.
Adisak Rohitasune, FTI vice chairman, said he agreed with the act's amendment because it would treat foreign investors with the same standard. "We have to speed up announcing the new act in order to make the policy direction clear in the eyes of foreign investors. Many of them now believe that we are impeding them from investing here."
In the future, Thailand's policy will be opened wider for foreign investors due to some pacts such as free-trade agreements. However, some industries in which local operators are not ready to compete with foreigners should be reserved, he added.