It will defend the pros and cons of the draft in detail - particularly the contentious points on the 'grandfather clause' and 'expanded period' - in a bid to make sure the NLA passes the law.

Skol Harnsuthivarin, secretary to Commerce Minister Krirk-krai Jirapaet, said yesterday those two issues were the main points of contention for members of the NLA opposing the draft.

"The ministry will also answer questions and point out both the positive and negative issues of the latest draft," he said.

The ministry will also step forward in lobbying NLA members to carry a vote soon to ensure the amendment of the Foreign Business Act is implemented by this government.

Skol pointed out that the ministry was also willing to answer questions from foreign investors but nothing could be changed, saying that it is "beyond the hearing" process.

The Japanese Chamber of Commerce in Bangkok on Tuesday expressed concern over voting rights, as the proposed change would force many to restructure their companies. Skol said the law would not, however, affect Japanese investors because they enjoy investment privileges from the Board of Investment.

Pronprom Karnchanachari, partner of the Legal Advisory Council Ltd, said yesterday the government should draw up guidelines for foreign companies operating in Thailand.

"Thailand should have clear and transparent regulations to help foreign investors make a decision," he said. He stressed that whether or not the law is passed, it would not lead to a reduction or increase in foreign direct investment within the first six months. In addition, he said, the government should liberalise more businesses in Annex III.

Steve Buckley, director of Trade and Investment at the British Embassy in Bangkok, said the embassy respected the right of the government to amend any regulations, but it should ensure a balance that benefits all parties involved.

He said the government should allow a suitable period for affected businesses to adjust themselves in accordance with the amended Act, adding that the government had made a positive move by extending the adjustment period from two to three years.

However, he does not see any need for change to the current legislation on the crucial issue of voting rights.

Buckley said the government should continue to control only the shareholding portion of foreign companies, rather than extend this to voting-rights control. Such an extension would cause difficulty for foreign investors, he added.

He also suggested the government review the lists in Annexes I, II and III, as the government seems to protect more businesses under Annex III - in which foreigners cannot easily invest. A source from a multinational company said that planned amendments concerning nominees had created uncertainty among foreign investors.

In the current climate, he added, foreign capital was needed to boost the economy. He said the government's policy had created a domino effect which had impinged on business expansion through to employment, manufacturing, exports - and finally economic growth.

Friedrich Hamburger, head of the delegation of the European Commission, on Tuesday talked to Agence France-Presse, saying that investors had been disappointed by Thailand's moves to place more restrictions on businesses.

"The changes would have more impact on new investors, who will possibly wait and see how the rules are implemented by this government or the next and put off their investments until then," he said.

"Given the recent policy changes, European investors have started looking for other potential investment locations apart from Thailand," he said.

Petchanet Pratruangkrai,

Achara Pongvutitham

The Nation