DSI plans foreigner proxy firm crackdown

BangkokPost: published Januari 7 2012

The Department of Special Investigation will crack down on foreigners, some of whom are gangsters, who illegally exploit loopholes to operate businesses which are normally off-limits to them. DSI chief Tharit Pengdit unveiled his plans after the cabinet had given the agency the authority to investigate nine more categories of special cases including human trafficking, computer crime and foreign business. Mr Tharit said executives were deciding how to to crack down on criminals this year. 

The DSI will target transnational criminals who have exploited loopholes in the legal system to use Thai nominees to run businesses not open to foreigners, as their influence was expanding.

The state was losing huge amounts of taxes and revenues as a result of such schemes, he said.

Under the Foreign Business Act 1999, businesses such as newspaper publishing, radio broadcasting, television, logging, rice farming and land trading are off-limits to foreigners.

Other businesses covered by the law such as sugar-making or mining must be majority-owned by Thais.

The law, however, has a loophole in that it does not forbid foreigners from holding a majority on the board of directors or having control over voting rights.

Mr Tharit said many foreigners have sought to invest in prohibited businesses by using Thai proxies to operate on their behalf.

Businesses which foreigners have entered include rock-blasting and crushing, sugar mills, tourism, engineering and architecture.

He said foreigners are behind the operations of many of these reserved businesses in Koh Samui and Phuket and several other tourist provinces.

Previously, many of these foreigners held land through Thai nominees for their own use, but now they are expanding their influence into new sectors such as real estate, land development and building condominiums, Mr Tharit said.

The DSI had also heard reports of a group of foreign gangsters extorting protection fees from other foreigners.

Mr Tharit said some of these foreigners had used Thai nominees to set up shell companies and used them as a front to launder money and transfer the laundered money overseas. Others are involved in passport forgery and human trafficking, he said.

Mr Tharit said the DSI would have to take an aggressive approach to cracking down on these activities before Thailand enters the Asean Economic Community in 2015.

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DSI to crack down on illegal foreign-run businesses

The Nation Januari 1 2012

Department of Special Investigation (DSI) chief Tharit Pengdit said yesterday his office would crack down on foreigners using Thais as nominees to buy land and run businesses from which they are legally excluded, while his deputy Narat Sawettanan said 536 websites had been shut down since December 13 for allegedly having lese majeste content. 

Tharit said many foreigners were using Thai nationals as nominees to run businesses prohibited for non-Thais under the Foreign Business Act 1999. The businesses include logging, newspapers and property development. He said the DSI was cracking down on foreign gangsters encroaching on forestland and running property projects as well as extorting others in Koh Samui, Pattaya City and other tourists cities, while human traffickers had brought Chinese prostitutes into Thailand. Claiming foreign gangsters aimed to launder money in Thailand-based businesses before transferring it offshore, Tharit said the DSI would be more proactive in going after them before Thailand entered the Asean Economic Community in 2015.He urged members of the public to alert the DSI to any suspicious activities.

Related: Thai business law for foreigners (samuiforsale) - News article: 'Nominee holdings in the gun'