By following the money trail, the Business Development Department found that Cypress transferred Bt131.54 million to Kularb Kaew, an amount equivalent to the value of Pong's shares in Kularb Kaew. Pong and Suphadej are among the seven founding shareholders of Kularb Kaew. At the same time, Suphadej was found to have borrowed Bt32.86 million from Siam Commercial Bank to finance his 20 per cent holding in Kularb Kaew. Cypress also emerged in the background, guaranteeing Suphadej's loan.

This finding concerning Temasek's use of nominees is part of a 10-page report released by the Business Development Department. The report had been kept confidential for weeks until it was leaked to the local press on Monday. Instead of further pursuing the department's investigation, caretaker Commerce Minister Somkid Jatusripitak has elected not to take action. Much worse, another committee chaired by deputy permanent secretary Yanyong Phuangrach has been set up to investigate the Shin Corp deal.

The controversial deal has put Temasek, Pong and Suphadej in an awkward position. Temasek, through Cedar and Aspen, could be found in violation of the Alien Business Law, which sets out ownership limits for Thai businesses under Shin Corp's control. Cedar's holdings in Shin Corp could be effected if Kularb Kaew were to be deemed an alien company because of Pong and Suphadej acting as nominees for foreign shareholders. It would be interesting to see how the authorities would enforce such a ruling. Pong and Suphadej sought a way out by reducing their stakes to a combined 4-per cent, paving the way for Surin Upatkoon to step in as the new major shareholder, but the damage had already been done. If the nominee controversy had not boiled up, Pong and Suphadej would not have been so desperate to bail themselves out.

Surin's arrival on the scene has not quelled doubts as to whether he is also acting as a nominee. He has declared that his stake in Kularb Kaew is purely his own investment. The Business Development Department, however, found that he received a transfer of Bt2.72 billion from HSBC Bank to acquire a 68 per cent stake in Kularb Kaew, which enabled him to emerge as the largest shareholder.

As it turns out, Fairmont Investment Group, a company incorporated in the British Virgin Islands, made the money transfer to Surin through HSBC. Greenland Co acted as an authorised manager in this money transfer. If Surin had really made the investment in Kularb Kaew on his own, why did he have to seek authorisation from Fairmont Investments Group and Greenland Co?

Foreign investors rely on custodian services or nominees to hold stocks on their behalf because it is convenient for them to do so. Many people like to argue, wrongly, that if Thailand takes action against nominees, it would drive away foreign investment. That is not the case here. The issue surrounding Kularb Kaew involves the Alien Business Law. This law is meant to protect certain industries or businesses, and to ensure they remain in the hands of Thais. To have the Alien Business Law in place and not enforce it on the grounds that foreign investors might be spooked is a weak argument.

Now that the confidential report on Kularb Kaew has been revealed, it is the responsibility of the authorities involved to enforce the law rather than dragging the matter out indefinitely. If the authorities insist that Kularb Kaew is not a nominee, then so be it. If they decide that Kularb Kaew is indeed a nominee, they have to enforce the law.