New Rules Re Companies

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Jan. 9 (Bloomberg) -- Thailand's junta-appointed government

today approved revisions to foreign investment laws that are

expected to tighten rules for overseas companies and investors.

The Cabinet approved changes to the foreign business acts,

government assistant spokeswoman Netpreeya Choomchaiyo said after

the meeting in Bangkok. Details of the changes will be announced

by Commerce Minister Krirk-krai Jirapaet at 3:30 p.m. local time

at the ministry outside Bangkok, she said.

Prime Minister Surayud Chulanont has also scheduled a

separate press briefing at Government House later today, the

spokeswoman said, without detailing what subject he would address.

Thailand's investment climate is worsening amid political

instability, foreign ownership probes and recent capital control

policies, Standard & Poor's said in a report yesterday. There is

a ``very strong'' chance the company will lower its outlook on

the Southeast Asian nation's credit rating, S&P's Singapore-based

analyst Kim Eng Tan said today.

``A lot of previous investments that have gone into Thailand

will have to be restructured, and even if not a lot of them pull

out there will be some pull out,'' Tan said in an interview

before the cabinet met. ``You are going to see less investment

coming in.''

Foreign investors have been ``unsettled'' by ``setbacks'' in

2006, including political unrest leading to the Sept. 19 coup and

probes into the takeover of Shin Corp. led by Singapore's Temasek

Holdings Pte., and foreign other nominee arrangements, S&P said

yesterday. S&P didn't change its BBB+ foreign currency rating,

the third-lowest investment grade, and its stable outlook.

Currency Controls

The rule changes come after new currency controls designed

to deter speculators in the baht currency triggered a stock

market crash last month.

The Bank of Thailand imposed currency controls on

international investors buying Thai assets on Dec. 18. A day

later it was forced to exempt share transactions after the

benchmark stock SET Index dropped 15 percent, the most in 16

years. The central bank kept the rules in place for bonds, real-

estate mutual funds and foreign-currency borrowings.

Banks are required to lock up 30 percent of new foreign-

currency deposits earmarked to buy bonds, property funds and

other non-stock investments and will deduct penalties from those

held for less than a year. The rules will stay in effect for at

least three months to six months, central bank Governor Tarisa

Watanagase said on Dec. 26.

Tarisa yesterday reiterated the central bank isn't

considering relaxing the regulations or penalties ``for now''.

Eight bomb blasts in Bangkok on Dec. 31 killed three people

and injured 38, including nine foreigners. Prime Minister Suayud

blamed the attacks on ``people who lost their political power''

following the military coup.

``The perception of Thailand as politically stable was

damaged,'' S&P said in yesterday's report. ``Local sentiment had

turned against foreign investors.''

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BN 15:50 *THAI NOMINEES MUST MEET REVISED OWNERSHIP LIMITS WITHIN 1 YEAR BN 15:49 *THAI NOMINEES MUST REPORT BUSINESS HOLDINGS WITHIN 90 DAYS BN 15:49 Thai Stocks Fall to Two-Year Low; Cabinet Approves Law Changes BN 15:48 *THAI FOREIGN INVESTORS CANNOT EXCEED 50% VOTING RIGHTS BN 15:48 *THAI FOREIGN INVESTORS MUST REDUCE VOTING RIGHTS IN TWO YEARS BN 15:47 *THAI FOREIGN INVESTORS MUST REPORT VOTING RIGHTS WITHIN 1 YEAR BN 15:46 *THAILAND TO LIMIT FOREIGN VOTING RIGHTS IN JOINT VENTURES BN 15:45 *THAILAND REDEFINES ALIEN BUSINESS CLASSIFICATION BN 15:44 *THAI FINANCE MINISTRY PRIDIYATHORN BEGINS MEDIA BRIEFING BN 15:44 *THAILAND'S STOCK INDEX HEADS TO LOWEST CLOSE IN TWO YEARS

just coming out