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Published on January 19, 2008

The Business Develop-ment Department is considering liberalising 12 business categories under the Foreign Business Act to brighten up the investment climate.

"If the listed [businesses] are deleted from Annex III, foreign-investor sentiment about investing here should pick up as business conditions will become more flexible," director-general Kanissorn Navanugraha said yesterday.

The businesses under review are brokerages, firms trading domestically in agricultural goods, advertising agencies, hotel operators, food- and beverage-retailers, seed-developers, computer service firms, warehouse-control service-providers, group consultants, pawnshops, schools and entertainment venues.

A study of the protected list will be finished in August as part of the department's regular revision of the FBA and in response to the wishes of foreign investors to explore new fields.

If the department finds that local firms can compete with foreign players, those businesses may be withdrawn from the protected list and opened up for foreign investors.

Those businesses came under consideration due to a change of timing since the amendment of 1999.

The department believes that if the government allows foreign investors to operate those businesses, it should increase the capability for domestic competition.

Thai enterprises may also receive more high technology  from foreign investors.

The final decision to be taken on freeing up the 12 businesses will be made by the Foreign Business Act Committee.

Foreign parties are currently banned from holding more than 50 per cent of those businesses as the law states Thais are not yet ready for competition.

The department is considering transferring to police the cases of 12 companies over nominees of foreign owners.

The investigation has been going on for a year, but progress has been very slow due to lack of cooperation from the companies in handing over documents, Kanissorn said.

The Commerce Ministry thinks the police will have more authority to force the firms to cough up evidence for the probe.

The department discovered that the case of the original 12 companies accused of breaching the FBA actually involved more than 50 firms due to convoluted shareholding structures.

"That makes the work harder, but if we find that the mother firm has a nominee structure, then it could indicate that the subsidiaries have also violated the law," Kanissorn said.

The department is striving to complete its investigation this year.

At first it will fine three business groups Bt5,000 for each instance of withholding evidence.

The department has many times asked for evidence such as shareholding structure and financial report status but received nothing, he said.

The firms facing complaints of non-compliance with the FBA are Ucom; Bolero-Tak Wu Holdings; Telenor; Hutchison CAT Wireless Multimedia; Asia Aviation, a major shareholder of Thai AirAsia; Thai Sky Airline; CenCar, the operator of Carrefour; Ek-Chai Distribution System, the operator of Tesco-Lotus; Siam City Cement; DHL Logistics (Thailand); Burapa Lumpini Land; and Izumi Zenkosha (Thailand), an event-organiser.

Petchanet Pratruangkrai

The Nation