Bangkok: Chairman of the Economic Development Committee, Mr. Sitthipol Wibulthanakul, highlighted a significant rise in the establishment of Chinese-funded companies in Thailand, with more than 300 new companies founded in 2024 alone. These companies, involving a shareholding pattern where Thais hold 51% and Chinese hold 49%, have sparked concerns about the use of nominees to bypass legal restrictions.

According to Thai News Agency, Mr. Wibulthanakul addressed the issue following a review of the construction company’s nominees linked to the building sector. The Office of the Auditor General (OAG) had criticized the involvement of Thai nominees holding shares on behalf of Chinese companies, prompting investigations by the Department of Special Investigation (DSI). The DSI had previously arrested individuals involved in such practices. The committee received information from several agencies, including the Department of Business Development and the Council of Engineers, indicating that China Railway Number 10 Company might have utilized nominees for shareholding purposes.

Mr. Wibulthanakul explained that nominee practices could lead to legal violations, especially when companies attempt to circumvent regulations by using impersonators as shareholders. The committee has urged the government and relevant agencies to extend their investigations beyond the OAG building to other constructions potentially involving nominee contractors.

The trend of forming new companies with Chinese capital has been rising significantly. Five years ago, there were only 40 to 50 such companies established annually, but the number exceeded 300 last year. Over the past five years, more than 500-600 companies have been formed under similar conditions, raising suspicions about the identity and legitimacy of the Thai shareholders. Mr. Wibulthanakul emphasized the need for thorough investigations into these practices and urged the government to take decisive action.

Mr. Wibulthanakul also highlighted that the problem of nominee companies is not confined to the construction sector. Similar issues have been reported in other sectors, including agriculture and education, where qualifications and student visas may be exploited for nominee business purposes. He stressed the necessity for the government to enforce existing laws strictly to address this longstanding problem.

While the Department of Business Development is responsible for company registration, Mr. Wibulthanakul noted that the department claims it lacks authority to probe financial connections, a task attributed to the DSI. However, the DSI indicated that it would only investigate if the case involved criminal activities linked to other offenses. Recent arrests in nominee businesses were related to activities like gambling websites and call centers, which led to uncovering financial links to nominee companies.