Voting Rights

[lingling]

What happened to the whole thing about foreign voting rights (preferred/common shares having different voting rights)? Do all companies where foreigners have <50% of the shares but >50% of the voting rights have to change, and if so when? There was a lot of talk a few months ago but now it has all gone silent. Or did I miss something?

[Martin_F]

It all depends upon the legal structure of the company and how the different classes of shares have been defined.

One of the concerns of the powers that be are differential voting rights.

So that if one group of shareholders own say 30% of the company but have effective control because one vote of the 30% of the shares has four votes for every one vote of the 70% of the shares.

This structure was possible because the exist shareholding laws for foriegn control was based upon the nominal value of the capital and not the effective voting rights.

This is one of the aspects that they considering changing.

The other concern was the Thai nominees situation where a foreign person or company gives a Thai person money to invest in a Thai company thereby circumventing the holding regulations.

It is really a grey area as there are many different methods available to still provide the foreign investor with security.

But comments in the press recently indicate that there may be a mellowing of the changes so wait and see.

But I would discuss with your legal advisors on the exact requirments.

[lingling]

So that if one group of shareholders own say 30% of the company but have effective control because one vote of the 30% of the shares has four votes for every one vote of the 70% of the shares.

This structure was possible because the exist shareholding laws for foriegn control was based upon the nominal value of the capital and not the effective voting rights.

This is one of the aspects that they considering changing.

This is the case for my company. What I was unsure about was if any of the proposed changes had been made and if there is some magic deadline for changing the voting rights to equal for preferred/common.

[1Rai.com]

So that if one group of shareholders own say 30% of the company but have effective control because one vote of the 30% of the shares has four votes for every one vote of the 70% of the shares.

This structure was possible because the exist shareholding laws for foriegn control was based upon the nominal value of the capital and not the effective voting rights.

This is one of the aspects that they considering changing.

This is the case for my company. What I was unsure about was if any of the proposed changes had been made and if there is some magic deadline for changing the voting rights to equal for preferred/common.

Indeed, what did happen?

Last thing I heard, about 6 weeks ago, was that the World Trade Organisation told Thailand that the proposed changes were against international trading laws and they faced three choices with regards to forcing EXISTING companies (new companies are a whole different matter) to change their share/voting right structures:

Choice #1: Thailand scraps the idea and allows companies to continue buying land using nominee companies.

Choice #2: Thailand forces existing companies to change their structures; if the companies don't want to for whatever reason, then Thailand should compensate the companies at the market value (i.e. the market value of the house).

Choice #3: Thailand forces existing companies to change their structures and does not offer any compensation whatsoever. The WTO believes this will lead to international trading sanctions being placed on them, which means Thailand can't sell rice to Japan or tuna to Australia.

And then it all went quiet...

[A_Traveller]

So that if one group of shareholders own say 30% of the company but have effective control because one vote of the 30% of the shares has four votes for every one vote of the 70% of the shares.

This structure was possible because the exist shareholding laws for foriegn control was based upon the nominal value of the capital and not the effective voting rights.

This is one of the aspects that they considering changing.

This is the case for my company. What I was unsure about was if any of the proposed changes had been made and if there is some magic deadline for changing the voting rights to equal for preferred/common.

Indeed, what did happen?

Last thing I heard, about 6 weeks ago, was that the World Trade Organisation told Thailand that the proposed changes were against international trading laws and they faced three choices with regards to forcing EXISTING companies (new companies are a whole different matter) to change their share/voting right structures:

Choice #1: Thailand scraps the idea and allows companies to continue buying land using nominee companies.

Choice #2: Thailand forces existing companies to change their structures; if the companies don't want to for whatever reason, then Thailand should compensate the companies at the market value (i.e. the market value of the house).

Choice #3: Thailand forces existing companies to change their structures and does not offer any compensation whatsoever. The WTO believes this will lead to international trading sanctions being placed on them, which means Thailand can't sell rice to Japan or tuna to Australia.

And then it all went quiet...

Do you have a link to the WTO statement? Since the key change, though badly presented. would be inline with international practice I'm somewhat puzzled by this response.

Regards

[Martin_F]

There are a couple of other threads going on at the moment on relating to the acticle that was published in the Bag of Poo.

The FBA went through cabinate approval and I think it is in review at the present time.

It appears that there are four big players under review at the present time:

Shin Corp (for some reason that I can't quite recall)

DTAC

Tesco-Lotus

Carrefour

They are all interesting cases because a lot of other businesses are operated under the same lines. Lets have a look

ESSO

Shell

Caltex

JET (Conoco-Philips)

Petronas

Blockbuster

BigC

Mackro

YumYum Restaurants

Macdonalds

Swansens

Achan

Toys-r-us

ok thats a start there must be a million more...

[lingling]

JET (Conoco-Philips)

(off topic, but) Conoco announced a couple of months ago that they were pulling out of Thailand.

http://www.wattsgoingon.com/2006/09/shell_and_petro.html

[Martin_F]

JET (Conoco-Philips)

(off topic, but) Conoco announced a couple of months ago that they were pulling out of Thailand.

http://www.wattsgoingon.com/2006/09/shell_and_petro.html

There was also a report in the BKKPost to the same although indicated PTT were interested.

It has gone quiet on that front so just wait and I didn't want to bring in other factors to a discussion of the FBA.