The International Chamber of Commerce (ICC) and the Board of Trade  yesterday urged the government to amend the Foreign Business Act and clarify the nominee issue, to avoid a repetition of the Kularb Kaew controversy, which was largely the result of an unclear definition of a nominee under Thai law.

ICC representatives met with Commerce Minister Krirkkrai Jirapaet for more than an hour yesterday. After the meeting, he said his ministry would consider amending trade and investment laws under the ministry's jurisdiction, based on fairness and benefit to both domestic and foreign enterprises.

During the first meeting with Krirkkrai after he became commerce minister, the foreign chambers of commerce raised the issue of unclear foreign-ownership regulations as their main concern.

ICC president Peter John van Haren said foreign investors were concerned about the unclear foreign-business regulations, and amending the act to clarify the foreign-ownership issue should promote foreign investment.

Asked if they were worried about the government's investigation into Temasek Holdings' alleged foreign-ownership violation, he said that as long as it was conducted in accordance with the rule of law, there should be no problem.

Allegations of Kularb Kaew violating foreign-ownership regulations have worried many foreigners, because a number of them hold shares through proxies, enabling them to benefit from possible legal loopholes by becoming involved in industries in which the government still imposes foreign-ownership limitations.

The unclear definition of foreign ownership in the foreign-business regulations became controversial after the investigation into Kularb Kaew to determine whether that company had bought Shin Corp shares on behalf of Singapore's Temasek Holdings. Van Haren said foreigners were also closely watching the case and that the government should ensure political issues remained separate from the investigation.

Foreign investors are also questioning their role in Thailand after some foreign businesses were investigated.

The Foreign Business Act states that Thailand allows foreigners to hold a maximum 49-per-cent share in most businesses.

The ICC and BOT also suggested the government amend laws to increase the proportion of foreign shareholding in some service sectors, such as advertising, tourism and education. They said Thai tourism enterprises would have a high potential to compete with foreign enterprises if they were united with foreign partners, creating a good business environment for the country. Increasing the shareholding ratio would increase the size of businesses and attract more foreign investors.

Van Haren said the education and advertising sectors needed improving and that an increase in foreign investment would develop the education system.

BOT chairman Pramon Sutivong said the government might consider attracting foreign investors by increasing the proportion of shareholding in some high-technology businesses.

Pramon supported the idea that the government should urgently clarify the definitions of "foreign" and "nominee" that have confused investors. He said the government must also amend some regulations related to foreign business investment, in order to ensure foreign investors' confidence while protecting the country's benefits.

Petchanet Pratruangkrai

The Nation