Thai Property News

The FT (October 5 2007 ) reports the Thai authorities’ decision to pursue a businessman accused of acting as a nominee in the purchase of Thaksin Shinawatra’s Shin Corp in 2006 has revived questions about pending changes in foreign ownership rules.

A Bangkok court last week approved an arrest warrant for Surin Upatkoon, whom police accuse of using funds from Singapore’s Temasek Holdings to purchase a 68 per cent stake in a holding company, Kularb Kaew, which is the majority shareholder in another company that owns 52 per cent of Shin Corp.

Mr Surin, a Thai national based in Malaysia, has denied any wrongdoing.  But the case is being watched closely by foreign investors, because if Mr Surin is found guilty it could have repercussions for Temasek, Shin Corp and any foreign companies using Thai nominees.  The Kularb Kaew case inspired the military-appointed government to propose changes to the Foreign Business Act that would define a company’s nationality by voting rights and not by shareholding, in an effort to stop the use of nominees and this would have broader implications for hundreds of foreign investors who have used nominees to invest in Thailand.

Analysts say however, that the government is seeking to prosecute the Kularb Kaew case in a way that would limit the fall-out - good news for those of us who may have used such nominees to invest.