Thailand’s Department of Business Development is mulling amendments to the Alien Business Act to make the use of Thai nominee shareholders in a foreign-controlled company an offence equivalent to money laundering, in a bid to curb the problem of foreigners taking control of businesses in Thailand, according to Payungsak Kangseng, director of the Division for the Prevention and Suppression of Illegal Businesses.
Division officials, the Ombudsman’s Office and relevant agencies are currently in Ratchaburi and Samut Songkhram provinces to inspect Chinese-operated wholesale companies suspected of collusion, which is suppressing the prices of Nam Hom coconuts.
These companies are engaged in the wholesale purchase of coconuts directly from growers and in the export of the fruit to China. Many of them use Thai nationals as nominee shareholders to give the impression that the companies are majority-owned by Thais.
Meanwhile, Songsak Saicheua, chairman of the Ombudsman’s Office, said that they have asked relevant agencies to tighten up controls on the export of farm produce by foreign-controlled trading firms to prevent market domination at the expense of Thai farmers.
The office has also suggested that both the Commerce and Agriculture ministries coordinate closely to form a supply chain, from the source of Nam Hom production to market.
Nam Hom coconut growers in Ratchaburi and Samut Songkhram, two main production areas, have complained that the prices of coconuts have now plunged to between 50 satang and 3 baht per fruit, while production costs are averaging 7 baht per fruit.
The planters said that the method proposed by the Commerce Ministry, to have the coconuts put on sale at modern trade outlets to circumvent the Chinese-controlled wholesale traders, does not work because of a shortage of packaging facilities in the localities and a lack of marketing expertise among the growers.
Lack of refrigeration facilities to preserve the coconuts is also cited as a drawback.
The coconut trade is not the only business controlled by non-Thais by using Thais as nominee shareholders.
Unscrupulous foreign businesspersons have been using the services of law firms to arrange for Thai citizens to serve as nominees in businesses actually run by foreigners, especially in tourist destinations such as Phuket, Samui Island and Pattaya.
