Minister of Commerce Speaks at FCCT
Suvarn Valaisathien spoke at the Foreign Correspondent's Club
of Thailand on May 9, 2001 and gave an overview of the Thaksin
administration's policies concerning the legal framework for
business and foreign investment. Dr. Suvarn is a lawyer by
trade and an expert in taxation and is currently Thailand's
Deputy Minister of Commerce.
proposed amendments to the Public Companies Act, Dr. Suvarn
stated that the first proposed change would be allowing shares
with no par value. The rationale for this is that the government
feels shares should have a present value and that par value
has no meaning. The second proposed change would be to allow
for debt to equity conversion. This, Suvarn claimed, would
benefit creditors. The third proposed change would be to allow
treasury stock, so that companies could buy back their stock,
a practice currently forbidden under Thai law.
of the antiquated provisions of the old Public Company law
was the bar on "treasury shares" (company shares
owned by the company itself). Presently, treasury shares are
allowed under the new Act provided that various conditions
are complied with.
also Suvarn stated the existing bankruptcy law was adopted
from the laws of other countries but created problems in practice.
The problems Thailand has encountered with regard to the corporate
restructuring area of the law are: (a) whether the debtor
should have a say in the plan drafted by the Planner and approved
by the Creditor. Currently if 75% of the creditors agree,
the Plan may be approved. (b) With regard to the fee paid
to Plan Administrator, right now there is no fee structure
built into the law. This can lead to abuses by the Plan Administrator
changing excessively (c) With regard to responsibility of
creditors in making the Plan succeed, Many debtors complain
that the Plan is drafted by the Creditors only.
after five years or after the completion of the Plan, if the
company is still insolvent out, the debtors should be released
from their financial obligations.
regard to the Foreign Business Act, the current administration
does not plan any new amendments but believes that it will
give a more liberal interpretation to the Act than previous
administrations. Approximately ten new regulations have been
drafted to the Act, but these regulations have not been promulgated
and are currently in the Council of State. It is not known
when or if these regulations will ever be made into law.