Horace

32 minutes ago, JLCrab said:

1 hour ago, Horace said:

I also don't think any judge or jury will be sympathetic to Musk when he makes these sorts of claims.

Well I guess that sure settles that.

I am not claiming it does.   More than that is required and your point about the high standard that has to be met in a defamation case in the is valid, but I also think Musk's outrageous behavior may have put Vernon's claim over that standard.  And I can see Musk coming out and making some more outrageous claims without having conducted any research.  

Vernon's lawyer in the US is good and well known.  He's not doing this for free.  He's doing this on a contingency fee basis.  He's looked at the facts and he thinks he has a good shot at getting some money out of Musk.  My hunch is that his hunch is right.

1 hour ago, xylophone said:

Very interesting Dogmatix and as regards shonky developers, well no one (as far as I know) has come up with a reason as to why the huge 990 condominium development on Nanai road (The Park by Phanason) has been stalled for almost 4 years.

 

I know some Thai folk who invested their hard earned money in buying these condos, which they were hoping to rent out as an investment for the future for themselves and families, but everything seems lost now.

 

Also I have some contacts and a few friends in the real estate business, although I'm not altogether keen on some of the methods they are using, however one which has shocked me a little is a major development near here, where all of the units have been sold off plan on phase 1 and 2, yet I have been reliably informed that it is highly unlikely that they will ever be built because of land wrangles and hassles and the agents know this, however the developers are offering such high rewards upfront for contracts to be signed, that the agents have ploughed on regardless.

 

Finally, I remember having a rather heated discussion with a director of real estate company here because on his website he was advocating foreigners using the company route, and also stating that 30+30+30 year leases could be signed and would be honoured.

 

It certainly is a minefield for the newbies and even those who have been here a while, but have yet to do any in-depth research into what they can actually own and what they can't, and what is legal and what is not and also how the whole "system" with regards to the interplay between the BIB, developers, lawyers and the courts actually works – – mostly financially driven of course and not often in the favour of the foreigner.

Useful.  I guess the take-away is to buy something that is already built and has a Chanote.

1 hour ago, JLCrab said:

2 hours ago, snowgard said:

19 hours ago, JLCrab said:

In the USA, based upon a judge's procedural rulings, it might be Unsworth who has to prove that he is not a pedo.

I not think so. Him is not a public person. The cave story is a one time story. The law for private persons is easier:

Specifically, public figures and plaintiffs are not only required to prove that the allegedly defamatory statements in question are false and harmful, but that the party who made or published them acted with “actual malice” or “reckless disregard for the truth.” Private persons and plaintiffs have a much less strict standard they need to prove, and are only required to prove the party or organization in question published the statement(s) with ordinary negligence.

Source: https://www.minclaw.com/defamation-of-character-what-is-online-defamation/

But you overlooked this from that same website:

Limited-Purpose Public Figures (LPPFs)

LPPFs are generally persons who have only availed themselves to public comment, criticism, or debate for a particular issue or controversy

 

If Vernon is a limited purpose public figure - debatable, but lets assume he Musk can establish that Vernon is a limited purpose public figure - than Vernon has to prove "actual malice".  Will that really be so hard if these claims are bogus?  Here is the definition of "actual malice":

actual malice occurs when:

• The defendant publishes a statement about the plaintiff he knows is false; or

• The defendant publishes a statement about the plaintiff with reckless disregard for whether it is false or true.

In other words, defendants who make statements about public figures are expected to do some background research if they doubt the statement is true. They are also expected not to publish any statement that they know is not true.

I see no evidence of Muck doing any research.  I really don't think he did any.  We have seen how this guy reacts to criticism and his publicity seeking hound.

I think he got pissed off because some "nobody" (in Musk's view) in northern Thailand said that the "great rescue plan" of publicity seeking Musk would not work in a rather pointed fashion (everyone seems to think Vernon was right about this) and Musk got pissed because he looked like a fool.  He responded with these outrageous comments without doing any background research whatsoever.  That seems to Musk's character; he is not known for being calm and deliberative. I could be wrong, but I think that is what happened.  We'll see in discovery what happened.

I also don't think any judge or jury will be sympathetic to Musk when he makes these sorts of claims.

24 minutes ago, theonetrueaussie said:

That may be true or it may be that Musk is extremely smart, has the evidence and is letting you, the media and everyone else dig their own holes. Let it go to court and then provide evidence and make it seem like all his enemies supported a pedofile. As I said before only time will tell on this case. 

If Musk has evidence and waits to release it, it won't look good.  It will look like he's playing a game.  He'll still be criticized for not releasing information he had about a dangerous child rapist.  I don't see how any of this helps Musk.  I can't see any narrative where Musk turns out to be the hero.  He's either (a) making horrendous and baseless claims about some guy who simply criticized his publicity seeking submarine scheme or (b) he's holding back evidence about a dangerous criminal.

I don't see a happy ending for Musk.  Right now, he looks like some idiot billionaire making baseless claims to divert attention from the failings of his business ventures in the US.  And if he's sitting on evidence that back up this horrendous claims, he still comes out looking like a smug a**hole.

5 minutes ago, colinneil said:

You clearly have no idea regarding the defamation laws in Thailand./

You post something bad about a company/person here and you can be sued, if you think i am wrong check it out.

You can go to prison here.  And private parties can commence criminal actions.  Musk has presumably consulted with lawyers in Thailand and know this.

1 minute ago, side said:

7 minutes ago, monkfish said:

Musk could Sue Unsworth for defamation in Thailand considering it was Unsworth who started the spat of iinsults with his interview on CNN.

Only if Musk can demonstrate that the comments amounted to defamation of character. My recollection is that Unsworth said Musk could stick the thing where the sun don't shine. That's not defamation.

 

Seeing as Musk has not implied as such in any of his subsequent tweets, then it's unlikely. Or did I miss something whereby Musk has alleged defamation re those comments?

There is a major difference between (a) Vernon's comment about Musk's submarine plan and (b) ruining someone's life by calling them a paedo, rapist, etc.  The former is not defamatory, the latter certainly is.

I have not seen any evidence to back up Musk's claims.  Looking at this purely on the basis of the equities (fairness), the burden is on Musk to provide some evidence to back up this claim.  Because he hasn't done so and because he acts like a child, I don't believe him. 

Vernon is faced with the very unfair prospect of having to sue an unscrupulous and unstable billionaire.

Musk is baiting Vernon.  He's quoted as saying that because he hasn't been sued, his original claim must be right.  Musk is even attacking the press because it has not investigated his claims.  From the Guardian:

Musk’s email to BuzzFeed, which was a response to Unsworth’s latest legal threats, said: “I suggest that you call people you know in Thailand, find out what’s actually going on and stop defending child rapists, you <deleted> <deleted> … As for this alleged threat of a lawsuit, which magically appeared when I raised the issue (nothing was sent or raised beforehand), I <deleted> hope he sues me.”

Musk sounds unhinged.  He's offered no proof to back up his claims.  Instead, he wants the press to "call people you know in Thailand".  What does is that supposed to mean?  Randomly start calling up people in Thailand?  Invest time and resources to investigate a claim Musk made simply because Musk is an "important person" and the press should follow-up on everything he claims, even though he doesn't provide a scintilla of evidence to back up his claims?

Musk is a billionaire, and could easily hire an investigator to find support for his claims if there was some.  But he hasn't done that.  Why?  The burden should be on Musk to provide evidence for such an outrageous claim.  Not the other way around.

But Musk is trying to make it work the other way around by putting the burden on Vernon (to, if the claims are false, disprove a negative), and, to some extent, he might succeed given the nature of the serious claims he is making.  Its a nasty and unfair ploy.  He's trying to set the rules of this dispute by claiming that if Vernon cannot prove he is not a sexual predator, he must be a sexual predator.  And if the press cannot find evidence that Vernon is a sexual predator, the press is not calling the right people to do their job. 

Sounds like Trump.

Musk has set this up where Vernon has little choice but to sue an unscrupulous and unstable billionaire.  Yes, he will be represented on a contingency fee basis.  But we have no reason at all to believe Musk's claims are true, and if Vernon was hoping to live a quiet life in northern Thailand, he's lost that now.  

20 minutes ago, eisfeld said:

Because there is none. They serve their and only their own interest ?

Agree.  This is a serious problem in Thailand.  In the US, at least, lawyers do get suspended, disbarred and imprisoned for their misdeeds. Not all of the time and  they are certainly not all angels, but US lawyers can and do suffer consequences when they act unethically or illegally.  Even jail.  You can even look up lawyers qualified (or disqualified) in some states on that state's bar site.  For example:  http://www.calbar.ca.gov/Attorneys I showed this website to a Thai qualified lawyer friend and he was horrified; he said this would be illegal in Thailand and, if anyone maintained such a site, they would go to jail for sure (here its the California State Bar itself that maintains the site).  

I also have never heard about any Thai lawyer being punished for anything.  Could it be that they never do anything wrong? ?

OK, one comment on lawyers who prey on foreigners in resort areas.  They exist.

One problem (and probably not the only problem) I see with these characters is that they don't seem to understand what a conflicts of interest is.  I don't work in this area, but years ago I recall a foreign executive in our HQ who wanted help on money he had invested in a property project in Koh Samui.  The developer kept asking for more money and more money was supplied , but the developer was simply unable to complete.

As a favor, I had someone in our office call his lawyer in Koh Samui to figure out what was going on.  No names will be mentioned because I do not want to get sued for defamation.  But one lawyer was representing (a) the property owner; (b) the developer; (c) the contractor hired to build the project (d) numerous other parties with conflicting interests in the deal;  and (e) individuals who invested in the villas this project was supposed to supply.  When we asked for documents on his behalf, the lawyer in Koh Samui refused to provide them, saying it would undermine the interests of his other clients.  When the big cheese back in London hired a local lawyer here (from a big local firm), he also could not get documents from the lawyer in Koh Samui because that lawyer claimed it would undermine his obligations to his other clients. It never got to the point of FBA and Land Act issues.  The project just collapsed.

So, yes, investments in resort areas are risky, you should never trust property developers (that axiom also applies in the developed world, but its doubly important here) and make sure you don't use the lawyer recommended by the developer.  This is also a problem for people holding Thai nationality, like me.  I was serious about looking at resort properties (I am less serious now about actually buying a resort property after looking at the asking prices), and I have noticed on several sites that property brokerages will gladly provide a lawyer to help on the property they are trying to sell you.  Pretty ridiculous.  If they don't recognize the conflict of interest in making this "offer", what else are they missing?  

Meanwhile the internet search for a villa on the beach with an infinity pool at an affordable price continues.

20 hours ago, Dogmatix said:

think we can summarise this thread for those who don't have time to read it all.

 

1. Despite several attempts over the years to amend it by eliminating the ability of foreigners to control their majority Thai owned businesses through preference shares with diminished voting rights for Thai shareholders, the 1999 Foreign Business Act still does not prohibit these structures. Unless the Act is amended in future it is still fine for foreign investors intending to run real businesses to establish companies with this type of structure, provided the Thai shareholders are people of substance who are able to demonstrate they had the wherewithal to invest in the shares using their own funds. It is also fine for these companies to own land needed for their businesses.

 

2.  In a grey area are companies established purely for the purpose of foreigners owning land with no intention of ever doing any real business and using Thai shareholders who are unable to demonstrate they had their own sources of funds to invest in the company.  Technically you can argue that they are also in compliance with the bare bones of the FBA and the Land Code because foreigners own less than 50% of the share capital which technically makes them Thai under the FBA and thus eligible to own land under the Land Code.  However, land officers have been instructed not to register land to companies with foreign shareholders or directors since 2006. So the only way to be reasonably sure of using these shell companies to buy land nowadays seems to be to establish them with 100% Thai shareholders and directors in the first instance and allow the foreign land buyer to acquire 49% and join the board as an authorised director, if desired, after the land registration is complete. 

 

3. Despite the fact that shell companies technically comply with the letter of the FBA and the Land Code viewed from the perspective of the less than 50% foreign shareholdings alone, the Land Department makes clear on its website that it views corporate structures designed to allow foreigners to own land as illegal.  It cites its authority under the Land Code to prevent registration, if it suspects the purchase is on behalf of a foreigner and its authority to force the sale of the land retroactively in cases where land has already been registered on behalf of a foreigner.  In support of its view it cites Sections 111, 112 and 113 of the Land Code that provide for criminal penalties for individuals and companies that acquire land on behalf of foreigners.  It also cites Sections 137 and 267 of the Criminal Code which provide criminal penalties for lying to and providing false information to government officials, presumably at the point when the Thai nominees tell the head of the land office registration section what is the purpose of the acquisition in compulsory interview for all land buyers. 

 

4. Responsibility for policing the FBA has been given to the DSI which posts a warning notice on its website that it is engaged in extensive investigations into the various strategies employed by foreigners to get around the FBA and own and control their own businesses.  The raid on DFDL's offices was clearly part of this process.  It is not yet known whether this was just a one-off that will be "settled" privately or whether it is the start of a wide ranging process, as apparently implied on the DSI's website.  Even if it dies down for now, this type of thing could crop up again at any time.

 

5. The situation regarding foreign business ownership and land ownership is unsatisfactory both for foreign investors and the Thai government and general public, which is by and large vehemently opposed to foreign land ownership.  Thailand remains stuck in the past has so far been unable to see its way clear to bite the bullet and introduce a foreign investment code that is competitive with countries such as China, Vietnam, Laos, Cambodia and Burma.  It is inevitable that one day this will come and it will probably involve opening out general service sectors to 100% foreign ownership, while at the same time amending the law to define as "foreign" any company where foreigners have effective management control, in order to protect sectors deemed as still needing protection, which would probably include land ownership and businesses dealing in and developing land.  

 

Anyone considering setting up a shell company to buy land today has got to think long and hard about whether this structure, which seemed to work perfectly well before 2006, is going to be a viable option for owning Thai land which they might want to own for 10, 20 30 years and might want to pass on to their heirs.   

I have a few nits and terms I would disagree with, but this is close enough.  I am also too busy to argue more.  Too much work, and I'd rather spend my time looking for a beach front villa in Phuket or Koh Samui with an infinity pool I can afford (actually, that is a bigger waste of time, since I am seeing prices well over 100 million Baht, which is totally out of my price range for a second place).

OK, there is a great deal to unpack.  Some of its old arguments, but some of it involves new issues (fortunately - because I am getting tired of going over the same ground again and again).  To be clear, I am not advocating use of these structures.  I am simply saying that, as Thai law is written, these can be used to own land. That's all I am saying.  But there is another issue we haven't discussed that complicates their use, and I am surprised no one has brought it up.  Perhaps because it so delicate?

1.  I constantly see the claim that these structures are illegal because foreigners "fundamentally" cannot own land coming up again and again.  It's a red herring.  A Thai is are buying land. These companies are Thai.  Foreigners are not buying land.  If there is a law that says that these preference structures (not foreign ownership of land) is illegal, provide a cite.  The two are as different as chalk and cheese.  Don't simply say its illegal because it violates some mystical blood and soil feature of Thai law.  Instead, provide a specific cite that expressly says these structures are illegal.  I think I have asked this question at least a half a dozen times, and instead of providing a cite to support the claim about this "overarching" provision of Thai law, the tendency is to dodge that question by ginning up non-existent provisions of Thai law to claim that the company's are "bogus" (post #536).

2.   If the Thai shareholders are bona fide and bought the shares with their own money and the company complies with corporate formalities, the company is not bogus.  And because it is Thai, it can buy land.  I keep hearing that they are bogus because they don't have employees.  But there is no requirement that a Thai company have employees. If there is, provide a cite?  These and other fictions are used to claim that preference share companies are bogus and its therefore illegal for them to buy land, but, again, no real support is provided for this circular argument.

3.  Rent paid on the land is revenue and can be used to pay dividends.  But I admit there is a legitimate point about paying dividends.  Perhaps the suggestion about using a premium on capital is the best way to address this.  As for funding the acquisition, Thai banks still provide funding. I just checked.  Why would they do that so if the structures were illegal?  Their security has no value.  

4.  The big danger with these structures and doing business generally in Thailand are its vague laws which are subject to near unfettered discretion and sometimes change.  That creates a swamp where the issues discussed here fester. Its the "C" word (for some reason I can link to an article about Departments where this problem is particularly present (try "corruption" "business" "portal" "Thailand" to access the cite I just looked at), but the Land Department is number 3 on that site. I have not blown this horn a half dozen times because it seems irrelevant, but its seems to carry some (unjustified) weight here, so I will let you in on another secret: I am Thai.  That doesn't make me an expert.  But I am embarrassed and disappointed by the protectionist and xenophobic response of other Thais to this issue.  I am embarrassed  and disappointed by the repeated failure to address the real problems here.  I can't cite to it here for some reason, but look at Transparency International's latest CPI rating of Thailand.  If you want to talk about real problems with investing in Thailand, that is the number one real problem.

2 hours ago, xylophone said:

Yes you can imagine how the advertisement might read for these gullible investors: –

 

Three Thai investors needed to invest 1 million baht each in a new company. Actually it is a company on paper only and not really a company because it produces nothing and employs no one.

 

It will be registered as a company to enable a foreigner to purchase a house and land here in Thailand and you will be “shareholders”, although you don’t have to worry about attending shareholder meetings, because there will be none. Furthermore you will have no rights as regards this foreigner or property.

 

As for a return on your investment, well this will be dependent on how much the foreigner can pay you from his own account, because this investment on its own produces no income or dividends.

 

Should you wish to divest of your shareholding, then you will have to find another “investor” to buy you out, because it’s very likely that the foreigner will not be able to. And, in the event that the foreigner gets into financial difficulties, then you are pretty much on your own with regards to how to recoup your initial investment.

 

If it sounds like something you would like to be part of, then

Oh brother. The Thai shareholders are bona fide if they pay for their shares in the Thai company with their own funds. The Thai company is buying the property, not the shareholders. Funding for the purchase can come in the form of a loan, a premium on capital, etc. That is the way all companies work.

And because a bona fide Thai company is buying the property you can’t claim that foreigners are buying land through a “loophole”. A Thai company is buying the land, not a foreigner. If the company is fully capitalized, complies with all corporate formalities and pays taxes, you can’t legitimately claim it’s a “”sham” company.

The Thai majority shareholders own a class of shares where the dividend is fixed at 10%, cumulative and paid before other classes of shareholders. 

Explain why that doesn’t work? And try to be civil.

5 hours ago, xylophone said:

6 hours ago, Horace said:

f you and everyone else have now come around to agreeing with this point, which I made at the very outset, that is great.  Thank you very much!

 Actually Arkady states that but I and others do not agree with your assumption, because the case for and against your argument is unproven either way, with others stating that the overarching principle that foreigners (with stated exceptions) cannot own land will prevail, or that rulings in such a case can change and reflect the Thai Governments "mood" at the time.

A little comedy to end the weekend?  First you claim there is no point in my making any further points because there is no dispute anymore that preference share structures, which involve Thai companies, are fine because they are not shams.  And now, less than 23 hours later, you contradict yourself, saying you: "do not agree with my assumption" (hint: "assumption" is the wrong word here).  In other words, stating it honestly, you don't like my analysis, but you are unable to articulate a principled basis for objecting to that analysis.

I think we are done here.

Here is a corruption hotline and Line ID: "PACC chief Prayong Preeyajit told The Nation that the centre has opened with a 24-hour hotline (09 2668 0777) and Line ID (FD.PACC)"  http://www.nationmultimedia.com/national/Bribery-hotline-for-foreign-investors-30273474.html  There is Leuk Krueng (my transliteration) Lt Pol Col in charge of foreign relations at the Public Sector Anti Corruption Commission whom I know and believe to be honest, but I suspect he wouldn't want me to post his personal detail here.

When you talk candidly with government anti-corruption officials (and forget about the NACC because they are thoroughly politicized), they will admit they are overwhelmed and cannot honestly investigate anyone who is well connected.  Remember the police general they sent to Southern Thailand to investigate human trafficking?  He fled to Australia and sought political asylum.  

In the long run I think Thailand will improve because younger and better educated Thais are sick of this crap, but over the last four years it has been four giant steps backwards. 

1 hour ago, xylophone said:

You are missing the point as to what the thread has become............it started out like that, but it soon morphed into a thread relating to foreigners setting up sham companies to own land.

 

See Arkady's post below, as well as many others debating the foreigner/sham company illegality.

 

That has to be very clear to all reading it except you!! 

I am not sure how you can speak for a thread and everyone who has posted on it, but my point has simply been that Thai law cannot prohibit a company that is majority owned by bona fide Thai shareholders, but controlled by a foreigner who holds another class of shares that gives that foreigner voting control and superior voting rights, from owning land or engaging in activities restricted under the FBA.  If you and everyone else have now come around to agreeing with this point, which I made at the very outset, that is great.  Thank you very much!

Oh, and TV members, if they hire a competent lawyer, are quite capable of forming a compliant structure to hold land or conduct business restricted under the FBA.  It is not limited to DTAC and it's not that hard to do. 

25 minutes ago, MekkOne said:

Arrest the tourist, and press charge to Sanook for reporting the news!

Unfortunately that does seem to be the first reaction of many Thai officials.

But I wonder if this will change with the proliferation of smart phones and social media?  I have always thought the easy and wide dissemination of this sort of information created serious problems for Thai authorities and gangsters that prey on tourists.

Before, they could deny that this event never happened.  Claim the foreigner was acting unhinged.  Hard to do that now.

Is it any accident that Thailand has a Computer Crimes Act that seems to be designed to stifle dissemination of these sorts of videos?  Is it any accident that truth is not a defense in Thai criminal defamation cases?  

I can see Thai officials and authority figures trying to stifle the dissemination of this sort of information with ridiculous domestic laws rather than addressing underlying problems that give rise to these sorts problems (here, reckless and dangerous driving), but the internet is international and, while I can and do see them expressing tremendous frustration with Facebook, etc. (recall prior failed efforts to "block" Facebook), I can't seem them prevailing. The game has changed.

14 hours ago, Arkady said:

That is the type of situation that is of more interest to TV members. Very few of them are controlling shareholders of large companies of the AIS and DTAC type.

The type of structure I have been discussed can be used by TV members. They don't need a Thai Hi-So.  They need a Thai who can afford the shares in a holding company and is willing to do so in return for a fixed, cumulative 10% return on dividends.  

Yes, its more expensive and cumbersome than the dodgy deals some here posited, but if a foreigner wants effective management control and economic benefit from a company that owns a villa in Koh Samu with an infinity pool (or any other place in Thailand), I don't see why they can't also use that structure.  It's not that expensive to do it right.  And I have to believe that DFDL did it right.

14 hours ago, xylophone said:

You obviously haven't been reading the majority of the posts Horace, because they are dealing with the sham/shell/fake company situation set up by crooked lawyers because farangs want to own property & land, with all of the constituent fake parts mentioned in my previous email.

You are missing the point of this thread.  This thread is about the raid on DFDL. Why did it happen?  

I don't have personal knowledge of what DFDL did here.  But I have been absolutely clear from the outset that I have talking about a preference share structure, preferably multi-tiered, with bona fide Thai investors that comply with corporate formalities where a foreigner has management control and superior economic benefits.  I have to assume DFDL used this sort of structure. 

I have never argued or even suggested a land owning company where there is an agreement in a lawyer's vault saying the Thai shareholder is holding shares on behalf of the foreigner as a nominee or agent is legitimate.  Indeed, go back to the first pages of this thread and you will see that I said that the this would be foolish and easily establish a nominee or agency relationship.

Recall that I have repeatedly asked why a Thai majority owned company that complies with corporate formalities and has bona fide Thai investors would be illegal simply because foreigners have management control and enjoy superior economic benefits?  That has been the crux of the argument here.  Why would such a structure be illegal or prohibited under the FBA or Land Act?  

Or do we all agree now that this sort of structure does not violate Thai law?

Maybe we do?  No one thus far has answered my question about why mere foreign control and economic benefit makes a Thai majority company an Alien company (or nominee or agent of an Alien) under the FBA or Land Act? Instead, when pressed to answer this question, someone posits a shady lawyer holding some sort of nominee deed of shareholding in his vault stating that the Thai shareholder must do as directed by the foreign shareholder. Or, without any explanation or analysis, claim that the company is, in some undefined way, "bogus".  

I don't think that DFDL employed the "nominee deed of trust in the lawyer's vault" approach  and I don't see why any foreigner needs to this, including the iconic foreigner retiree who wants a villa in Koh Samui with an infinity pool.  

If the preference share structure works, why can't our foreign retiree use that structure.  Its cumbersome, but when you consider the cost of villa in Koh Samui with an infinity pool, it would be foolish not to adopt this approach.  This thread is about a raid on DFDL, and I can't believe they used the indefensible  "deed of nominee shareholding in the vault" approach.  

So, why did DFDL get raided if they employed multi-tiered preference share structures that have bona fide investors and comply with corporate formalities?  That has always been the question here.

4 hours ago, xylophone said:

invest no money whatsoever in this company and do not attend shareholder meetings to assist with the

Chalk and cheese.  We have been talking, from the beginning, about a structure where the Thai shareholders do invest money and retain evidence that they did, in fact, invest money. Look at my example.  

Let's also say, as I have said before, that they get a return in the form of a fixed and cumulative right of 10% dividends on their paid-in capital.  The company also complies with corporate formalities, such as the board of director meetings, annual shareholders meetings to approve the annual financial statements.  Not hard to do.  The company also pays tax.  There is income in the form of rent and rent itself is subject to specific tax (I think around 12.5%) under the Land and Property and Property tax.

You have simply removed that part of the structure to make the company look bogus. Let's put these parts back in.  How can you claim this structure is illegal or the company is bogus?

The company pays taxes. Thais put in their own money. The Thai get a commercial return on their investment.  How is the company illegal or bogus?

 Make it even safer.  The foreigner holds of his 40% shares (with 95% voting control and superior economic rights) in a holding company that is 60% owned by Thais. The Thais are bona fide investors, meaning they invested their own money, can prove it and get a generous commercial return on their investment (10% per annum), etc.  The holding company doesn't even own land. The holding company is an investment company, which is permitted under Thai law.  The holding company owns 99% of the shares in the bottom tier Thai company that owns the land.  The Thai company that owns the land is 99% Thai, but controlled by a foreigner and that foreigner (after the cumulative 10% dividend paid to the Thai shareholders at the holding company level) enjoys all of the economic benefits from the structure. 

Yes, this is cumbersome.  But how is it illegal?

12 hours ago, Dogmatix said:

The Land Department feels that the Land Code provides very clear penalties for individuals who register land for aliens,

But if the land is acquired by a Thai majority owned company, the land was not acquired by an Alien and these penalties would not apply. 

What makes a company that is majority owned by Thais, an Alien or a foreign company instead of a Thai company?  What provision of the Land Act says that a company where a majority of the shares are owned by bona fide Thai shareholders (i.e., Thais who invested their own money to buy shares in the company), is actually a foreign or an Alien Company buying land in circumvention of the Land Act?  

Thai law allows companies to have shares with different voting and economic rights. Where does it say that the shares held by foreigners can't have superior voting or economic rights?  Assume: (1) a company where Thais own more than 50% of the shares; (2) the Thais invested their own money to buy the shares and can prove it; and (3) the foreigners hold less than 50% of the shares but their class of shares has superior voting and economic rights.  How does this violate the Land Act?  

This is where we keep going in circles. And that is why I keep asking  for a cite to a specific law that says this specific set of facts violates Thai law.

16 hours ago, Gulfsailor said:

True. Except of course when there is an undated but signed agreement between said Thai shareholder and a yet to be filled in party/person, by which his shares are transferred to this new person/party. That's how Thai shareholders in 'sham' companies are exactly told how to vote and this act as agents. In return they get a monthly stipend. 

Hard to proof such agreement is in place, unless one raids the law firm who set it all up and where the contracts are likely being kept..

You are right, but if is this what was actually done, it's not a preference share structure, and someone was very foolish.

10 hours ago, Samui Bodoh said:

My sincere apologies to my American friends; I know that many (a majority!) did not vote for him, but he is the President of the US, not simply the President of those who voted for him.

And we're doing everything possible to get this criminal out of the Whitehouse.  I have a theory, and maybe it will be quickly shot down on this forum, but most of the people who voted for Trump, are not the kind of people that travel to Thailand or anywhere else for that matter.

I have not been back to the US in years and the last time I was back I was in New York and California.  I did not meet a single person who voted for Trump.  Not one.  I will be back shortly for a quick visit to America's "heartland".  Maybe I will actually meet a Trump supporter. 

3 hours ago, boonrawdcnx said:

t looks like the banks are at it again cheating on loan applications lending money to people who are obviously not able to repay - just like before the last financial crises - otherwise this would not be possible.

This sounds so familiar.  Where and when did I hear this before.  Oh, I remember now, I was in the boardroom of a then major Thai bank in early 1997.?

On 8/31/2018 at 4:24 PM, Arkady said:

Thank you for that. You may be right but here we have a very important law, in fact a "code" which puts it on a par with the Criminal Code and the Civil and Commercial Code, that has been on the books since 1954.  You are saying in essence that Section 113 of the Land Code is effectively unenforceable because the CCC definition of "agent" must take precedence in the absence of any specific definition of the word in the Land Code. That means that those who facilitate the establishment of a shell company with Thai shareholders who are shareholders in name only purely to facilitate the purchase of land by the foreigner cannot be held criminally responsible, unless they have signed a specific agency agreement which binds them to do the foreigner's bidding in all related matters, which, as you point out, no one would ever do.  The Land Code has been amended many times since 1954.  It seems odd that none of the Interior Ministry's legal eagles ever thought of amending this section to make it enforceable.  Did several generations of bureaucrats and politicians deliberately leave it like that intentionally, while allowing the Thai public to take the law at face value and believe that foreign ownership of land was illegal with criminal penalties.

 

Or could it be the Interior Ministry, perhaps wrongly, believes the law is enforceable and that there has never been any need to amend it?  It would interesting to ask them that question, as well as to to confirm through extensive research that there has never been a conviction under this law since 1954.

Sort of.  But OldSiamHand points out that there does  not have to be a writing, and I think he is right.  The "transaction" would be holding the shares not the actual acquisition of property.  Hence, an oral agency agreement would suffice.  But how to prove it?

Unless someone is incredibility foolish and essentially sets up an agency relationship in writing, I don't see how there could be a conviction (although never underestimate the level of stupidity and venality in the real estate industry). I am not aware of any convictions under this law.   Anyone aware of any convictions?

Regulations could be enacted to prevent the use of dodgy structures from buying land.  But that means stopping the land registration before it occurs.  No expropriation if that occurs.

The "legal eagles" the Interior Ministry may very well be aware of this, but raising it could lead to a tremendous lose of face.  Face often trumps good sense here.   Just read that there is still a debate about whether the GT200 bomb detectors (an obvious fraud) work and should be used.