With concern deepening over foreigners raising rice in Thailand, the government has vowed to protect rice farming and trading against outsiders, including those from Asean, since the rice business is involved with national security under the Foreign Business Act (FBA).

Deputy Commerce Minister Siriwat Kachornprasart said yesterday that the Department of Business Development (DBD) and Department of Special Investigation (DSI) were seriously investigating the ownership of companies, while randomly inspecting rice farms in many provinces.

A report has shown that the number of foreign businesspeople occupying paddy fields and starting rice-trading houses in this country is increasing.

"Foreigners appearing to do prohibited businesses in Thailand, including rice farming, are under scrutiny by the DSI and DBD. Initially, the agencies could not find any foreigners that have breached the act on doing rice farming in Thailand. However, the government will closely probe businesses involved in rice farming and trading to see if any have deviated from the law," Siriwat said.

Despite the move towards the Asean Economic Community by 2015 and seamless trade and investment among member states, Asean investors cannot hold a majority stake in a rice trading firm in Thailand or do rice farming, as that is banned under the FBA, he said.

Under this law, rice planting and trading are listed in Annex I for businesses that that are hands-off to foreigners, since they touch on security issues. Businesses are defined as foreign if they are more than 49.99 per cent owned by foreign shareholders.

Banyong Limprayoonwong, director-general of the DBD, said the department in cooperation with the National Police and the DSI would continue to inspect rice farms for foreigners breaking the law. However, it is hard to prove nominee cases as the current FBA allows an investigation only into the shareholding structure, he said. The DBD has been checking documents and observing foreign companies' movements to look for signs that they might be concealing their true business objectives.

Recently, the DSI visited farming areas in Chanthaburi, Trat and Rayong - provinces in the East. But it found no foreign ownership nor rice farming.

The department will focus on companies with a high percentage of foreign shareholders or allow foreigners to hold more than 49 per cent.

According to the department, among the 509,144 registered companies in the country, about 30,000 have foreign owners. Of those, about 3,000 are at high risk of violating the FBA as they have more than 49-per-cent foreign ownership.

The DBD has received many complaints about enterprises not honouring the FBA. Of those, the DSI is continuing to study the DTAC (Total Access Communication) case, which has been alleged as a breach of the act since a year ago.

Source : The Nation