Fba Reforms - Forget It

[dsfbrit]

Ikea shelves entry into uncertain Thai climate

By Mark Kleinman Asia Business Editor

Last Updated: 11:36pm BST 29/09/2007

http://www.telegraph.co.uk/money/main.jhtm...9/cnikea129.xml

Ikea, the Swedish retailer known around the world for its flatpack furniture, has put plans to expand into Thailand firmly on the shelf amid an increasingly uncertain environment for multinational investors.

Swedish retailer has postponed Thai move

The Daily Telegraph can reveal that the lingering after-effects of last year's military coup and a series of tougher laws on foreign ownership have prompted Ikea to postpone a move into one of South-East Asia's most important economies.

The delay reflects growing nervousness among overseas investors following draconian revisions to Thailand's Foreign Business Act and the publication of draft legislation covering the retail sector, which may have a serious impact on Tesco and Carrefour, the French supermarkets group.

Since the ousting of Thaksin Shinawatra, the former prime minister and the man who now owns Manchester City Football Club, a year ago, the Thai government has proposed changes to the definition of a "foreign" company to mean one which is not controlled or majority-owned by Thais.

It has also vowed to stamp out the use of nominee shareholders for the subsidiaries of multinationals operating there, a move which has alarmed many overseas firms which have largely relied on the use of such structures.

"The foreign business ownership laws have always been complicated, but there has always been a measure of understanding," said Alastair Henderson, managing partner of Herbert Smith, the law firm, in Bangkok.

"The latest proposals have meant great uncertainty for companies about the regulatory climate they are going to face and whether they will be able to retain control of their investments."

According to a spokesman for Ikea, the Thai market "is still under evaluation" by Inter Ikea Systems, the organisation which owns the home improvement retailer's concept and trademark. An unnamed franchisee has been selected to partner Ikea, she added.

"This partner will further investigate the market for final approval by the franchisor. At this point in time, it is premature to confirm if and when an Ikea store will open in Thailand."

A continued toughening of foreign ownership laws could affect a string of Britain's biggest companies, including British American Tobacco, Alliance Boots and HSBC.

The country's interim government, which has said it is likely to hold democratic elections in December, has held numerous rounds of talks with officials from the European Commission and overseas chambers of commerce stationed in Bangkok.

One senior official said the Thai government's actions were evidence of "a clear protectionist backlash" and warned that its stance could lead to Thailand being "cut out of the global economy".

Among the foreign investors with most at stake is Tesco, which operates 400 stores and employs more than 28,000 people in Thailand.

"We continue to invest in the country, opening new stores," said a spokesman for Britain's biggest retailer. "However, we are concerned that the current uncertainty in Thailand may deter new foreign investors from entering the country."

Edited September 30, 2007 by dsfbrit

[Crossy]

What is it about IKEA?

This is now the FOURTH thread stating that they're not coming here!

[naka]

What is it about IKEA?

This is now the FOURTH thread stating that they're not coming here!

Goodness knows Crossy. Who get's excited about a purveyor of cheap and nasty furniture ?

Having said that, if Thailand gets too ultra-nationalistic about who can manufacture here then

their only exports will be rice, shrimp, cooked chooks and dried longan

Naka.