Bangkok: The Department of Business Development is ramping up its investigation into fragrant coconut businesses suspected of using nominee structures, following findings of supply chain manipulation and price suppression. Initially, 15 businesses in Ratchaburi, Nakhon Pathom, and Samut Sakhon provinces have been identified as at-risk, with information forwarded to various regulatory agencies for in-depth investigation.
According to Thai News Agency, Mr. Poonpong Naiyanapakorn, Director-General of the Department of Business Development, disclosed that the department has initiated measures to scrutinize businesses in the fragrant coconut sector. This comes after uncovering activities by foreign investment groups using Thai shareholder structures as "nominees," potentially distorting price mechanisms and adversely affecting Thai farmers' incomes.
The Department has been monitoring the fragrant coconut business situation, compiling data on industry supply chain structures. Initial findings revealed 15 businesses at risk of operating as nominees across Ratchaburi, Nakhon Pathom, and Samut Sakhon. Mr. Poonpong noted that the department acts as a "targeting" agency under the Ministry of Commerce's assignment, forwarding information to agencies like the Department of Special Investigation (DSI), the Central Investigation Bureau, the Trade Competition Commission, and the Revenue Department. Detailed investigations are currently examining shareholder structures, business operations, and trade practices to identify any illegal activities.
The monitoring has highlighted three critical aspects of business practices by foreign investment groups needing close attention: using Thai companies as proxies for leasing coconut plantations, operating fully integrated businesses to control supply chains, and setting purchase prices that may cause abnormal price drops in fragrant coconuts.
The Ministry of Commerce has assessed Thailand's fragrant coconut industry, identifying four major crises: shortages leading to soaring prices, oversupply causing plummeting prices, competition from low-cost foreign capital, and the issue of adulterated products. These factors destabilize the market and impact farmers' incomes. It was reiterated that using Thai nationals to hold shares for foreigners to bypass the Foreign Business Act B.E. 2542 (1999) is illegal, punishable by imprisonment, fines, or both, with potential daily fines for ongoing violations.
This afternoon, the Department of Business Development is convening a meeting with relevant agencies to establish guidelines for inspecting and suppressing illegal businesses using nominees. Key participants include the Department of Agriculture, the Department of Special Investigation, the Economic Crime Suppression Division, the Revenue Department, and others.
These measures aim to ensure fair trade competition, protect Thai farmers, and maintain the long-term stability of the country's fragrant coconut industry.