DSI to be decisive about nominees

Source: Samui Community March 15 2007

The Department of Special Investigation is continuing with its investigations into ‘Five Samui Nominee' who illegally registered hundreds of companies for foreigners to trade with and buy land on Koh Samui. The DSI Secretary-General Mr. Sunai Manomai-udom, vowed to take back all land in forest and mountain areas that was illegally occupied by foreigners. However, he also said that each case would be dealt with using prudence to prevent further adverse affects on investments.

The private sector hopes to find resolutions to deal with current questions on foreign ownership on Samui, as many foreign investors have already been put off buying real estate on the island. Many believe that a clear legal framework should be established by the government, with long term lease periods of 30-50 years offering the most obvious alternative to outright possession. The DSI recently set up a meeting for officers working on the case of the ‘5 Samui Nominees' and invited Associate professor Angkarat Priabjariyawat from the National Institute of Development Administration (NIDA), an expert in tax examination from the Court of Justice, to give a lecture prior to sending out the team on a field survey of Samui.

The case of the ‘5 Samui Nominees' is complex because the company registration involved Thai employees who were also shareholders of a foreign company. In addition, the companies involved showed no trading records, which meant they were not paying tax to the government. A subsidiary company performed land allocation that eventually led to forest invasion, then subsequent construction on the mountainside damaged the environment and drew attention to the case.

Khun Sunai emphasized the need for great care with regard to this investigation. It is the main case proceeding directly from the much-publicized ‘Banditos' arrests on Samui and any violation of the Foreign Business Act will mean that other companies may also be legally accountable, including the consultancy firm that provided the names for the company registrations. Altogether, around 2,300 million baht was transferred from abroad, most of which is believed to have been the profits from illegal businesses, invested for the purpose s of money laundering.

DSI officers said that their team would visit Samui again to talk to witnesses, because many claimed they knew nothing about the company registration except that their names were being ‘borrowed'. Further investigations will take about a month before any suspects can be officially charged.


Locals used as dummies by real estate firms

Source: Samui Express - February 23 2007

The Department of Special Investigation (DSI) said it would wage a crackdown on the practice of several law-consultancy agencies using their staff to be listed as shareholders in foreign real-estate business to circumnavigate the law.

This was announced by DSI chief Sunai Manomai after he and other DSI officials tackled this issue in a meeting with Justice Ministery Caretaker Chanchai Likhitjitthai.

It was reported that 340 law consultancy companies were found involved in using their own staff(s) as shareholders of foreign companies so that aliens could run their real-estate and property businesses.

The law companies also allegedly issued fake documents in order to avoid paying tax payment.

The DSI said it had received reports that a lot of money (running to billions of baht) had been transferred to the bank accounts of these law firms.

Earlier, a crackdown on public-land encroachment was triggered by the case of the Bandidos gang (allegedly composed of foreigners), which was allegedly behind some real estate companies involved in land encroachments. The gang members, led by Kim Lingaard Nielson of Denmark were arrested middle of last year.

It was alleged that law consultancy companies has a hand in some intrusions into public lands.

According to the law, Thais should own at least 51 percent of a company and foreigners 49 percent utmost, but law consultancy have allegedly used Thai nominees, who are mostly employees of these agencies.

In addition, the law consultancy have allegedly taken advantage of loopholes in the law to give a special rights to foreign shareholders, which allows them to have more shareholder votes. For example, one share of the company would have 10 times so that even with the foreigners' 49 percent stake, they have more seats and can own houses and lands on samui.

From investigations many villa owners on Samui were wanted by the police in Scandinavian countries. Thai police warned that some of them were linked to the Bandidos Gang.

The DSI said it was gathering more evidence to be used in its legal action against the companies on charge of using Thai nationals to own shares on behalf of foreigners.

Land investments on Koh Samui and Koh Phangan have boomed, resulting in so many law consultants offering their service to foreign investors.