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Officials to decide on FBA in April
Bangkok Post – 14 March 2007
PHUSADEE ARUNMAS
The government plans to take 30 days to decide if it will use the new draft of the Foreign Business Act prepared by a group of National Legislative Assembly members.
Alternatively, the assembly could be asked to consider the new NLA version together with an earlier FBA draft that the government approved in January, according to Commerce Ministry officials.
The NLA draft, signed by more than 50 legislative members and drafted by former banker Somchai Sakulsurarat, broadly mirrors the government's version, but differs in how the issue of voting rights held by foreign shareholders is managed.
The government version defines a company as foreign if foreigners hold more than half of shares or control over half the voting rights. Companies in violation of the voting rights have one year to report their structure to the Commerce Ministry.
Existing firms operating under List 3 of the FBA, covering mainly service firms, would be ''grandfathered'' under the law. But firms operating under Lists 1 and 2, which include mass media, domestic transport and land trading firms, would have two years to restructure to meet the voting rights limit.
Under the NLA version, the voting rights condition would remain a part of the definition of foreign companies, but the grandfather clause, restructuring period and reporting requirements would be removed.
Instead, a new committee would be established to review cases in which foreigners held a majority of voting rights, with firms operating on a ''good faith'' basis waived from the FBA. The committee would also examine the sources of capital of Thai investors to ensure that they were not acting as nominees.
Both the NLA and government versions of the FBA also call for stiffer penalties for violators as well as minor changes in List 3 businesses.
One Commerce Ministry official said that minister Krirk-krai Jirapaet was unfazed by the NLA draft, and that it remained uncertain whether the FBA reforms would be considered at all before the interim government's term expires.
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