Any Way To Prevent A Change of Directors

[inquisitive lobster]

Hi There,

Thanks for taking the time to read my post.

I wanted to know:

1.)if there was a way to prevent any new directors from being added to a company and

2.)if there was any to prevent any directors from being removed from a company?

If anyone has any ideas please feel free to share.

Warm Regards,

IL

[maoro2013]

Surely the shareholders control the constituency of the board. Are you a shareholder with enough shares?

[CMBob]

It's a bit difficult to answer your question given you haven't mentioned what type of organization, country involved, etc. Presuming you're talking about a Thai corporation here in Thailand, you might be able to answer your question by reading the constitution and bylaws of the corporation as those documents set up the rules for the election, appointment, and removal of Directors.

[Gsxrnz]

What he means is that any dodgy lawyer in cahoots with a shareholder/director can forge documentation and screw you.

In the real world there would be ramifications. In Thailand there have been countless situations where westerners have been royally screwed by their "directorship" being removed fraudulently. The BIB don't give a toss.

The short answer to the OP's question is NO.

The best safeguard is use a very highly respected legal firm, not some dodgy dude that hung his shingle beside a 7/11.

Edited December 23, 2015 by Gsxrnz

[BigFun]

As I understand it the director has power to alter the shareholding structure without needing consent. Thus the directorship is a very important role. Signing powers are noted on Co.docs and can be one, a combination of directors or a sole named director.

Technically a s/h vote could be taken at a co. meeting and a new director appointed, hence the need to control voting rights -51%.

[Gsxrnz]

As I understand it the director has power to alter the shareholding structure without needing consent. Thus the directorship is a very important role. Signing powers are noted on Co.docs and can be one, a combination of directors or a sole named director.

Technically a s/h vote could be taken at a co. meeting and a new director appointed, hence the need to control voting rights -51%.

You're missing the point. The company constitution and the law are irrelevant.

Changes can be made fraudulently and illegally, property sold or ownership changed, and the police don't care.

This is Thailand.

Surely you've all seen and heard about the many cases of this happening?

Those that assume the law is there to protect you are sadly misinformed, and usually are the ones that wind up getting screwed.

Here's one reference that outlines the process perfectly. http://www.bbc.com/news/magazine-34346620

[Suradit69]

What he means is that any dodgy lawyer in cahoots with a shareholder/director can forge documentation and screw you.

In the real world there would be ramifications. In Thailand there have been countless situations where westerners have been royally screwed by their "directorship" being removed fraudulently. The BIB don't give a toss.

The short answer to the OP's question is NO.

The best safeguard is use a very highly respected legal firm, not some dodgy dude that hung his shingle beside a 7/11.

" In the real world there would be ramifications."

We can just be thankful that in the real world there's no clandestine corporate manipulation or financial fraud that regulatory agencies ignore or can't be bothered investigating for years on end.

One example among countless others:

Washington Post Staff Writers

The Securities and Exchange Commission learned about what it describes as one of the largest securities frauds in history when Bernard L. Madoff volunteered his confession, raising questions about the agency's ability to police the financial marketplace.

The SEC had the authority to investigate Madoff's investment business, which managed billions of dollars for wealthy investors and philanthropies. Financial analysts raised concerns about Madoff's practices repeatedly over the past decade, including a 1999 letter to the SEC that accused Madoff of running a Ponzi scheme. But the agency did not conduct even a routine examination of the investment business.

[SOTIRIOS]

...the point is...we..... are here....now....and ....we .....are the targets....

What he means is that any dodgy lawyer in cahoots with a shareholder/director can forge documentation and screw you.

In the real world there would be ramifications. In Thailand there have been countless situations where westerners have been royally screwed by their "directorship" being removed fraudulently. The BIB don't give a toss.

The short answer to the OP's question is NO.

The best safeguard is use a very highly respected legal firm, not some dodgy dude that hung his shingle beside a 7/11.

" In the real world there would be ramifications."

We can just be thankful that in the real world there's no clandestine corporate manipulation or financial fraud that regulatory agencies ignore or can't be bothered investigating for years on end.

One example among countless others:

Washington Post Staff Writers

The Securities and Exchange Commission learned about what it describes as one of the largest securities frauds in history when Bernard L. Madoff volunteered his confession, raising questions about the agency's ability to police the financial marketplace.

The SEC had the authority to investigate Madoff's investment business, which managed billions of dollars for wealthy investors and philanthropies. Financial analysts raised concerns about Madoff's practices repeatedly over the past decade, including a 1999 letter to the SEC that accused Madoff of running a Ponzi scheme. But the agency did not conduct even a routine examination of the investment business.

[inquisitive lobster]

Hi Guys,

Thanks for all the great answers and for the wealth of information.

This now raises another question I have; from all the cases I have seen so far involving this scam, all have involved the spouse being a shareholder and actively participating in the scam.

Do you guys know of any instances where a non-shareholder of the company manages to weasel there way in by replacing the current director/s with themselves or another person?

Explanation for my question:

Person A: Non-Shareholder and Scammer

Person B: Shareholder

Person C: Third Party that is also NOT a shareholder

Can Person A replace person B as director with either himself/herself or Person C?

Kind Regards,

IL

[djlest]

technically if 51% of shareholders vote you out and your 49%, then your out. The secret is having that 2% holder hidden from the other majority shareholder.

if you hold 49% you are also a majority holder, and technically all majority holders have more rights and voting powers. But in Thailand, that means nothing if a dodgy lawyer or judge is greased.

lets not forget 49% maximum foreigners can be shareholders, 51% Thai. its always a good idea to get a few 2% or lesser shareholders, usually a motorbike taxi or the likes to sign the last few %. That gives you equal power to the other Thai, but you need keep the other SH hidden and also have a pre signed release letter locked away in your safe,

To protect yourself in Thailand from dodgy lawyers and dodgy co ltd takeovers, you will also need a dodgy lawyer and accountant on your side.

fight fire with fire as they say...

Edited December 23, 2015 by djlest

[doublephil]

If we are talking about scamming, forged signatures, etc. - then anything is possible - but if it is illegal it can be challenged in the court. It may come as a surprise to some people - but there are plenty of decent lawyers around as well who could do that- and could win. I know because I have had the good fortune to meet some over the years.

If we are talking about what can be done legally - then changes to shareholders and directors, including who has signing rights, can only be authorized by those people who are defined in the company registration as being authorized to sign company documents. In the case of my company, 2 signatures are always required, and one of them must be mine. Nothing else would be legally valid.

[WorkingTourist]

Changes can be made fraudulently and illegally […] the police don't care […] This is Thailand.

[…]

Here's one reference that outlines the process perfectly. http://www.bbc.com/news/magazine-34346620

From your reference: “[Rance’s wife] is now serving a four-year prison sentence” and

“Vard's Thai partner […] has been sentenced to 17 years in prison for the fraud”.

The issue is that the foreigners want compensation which should probably be a civil lawsuit, but their (former) partners have no money, and that is why they are complaining to the media about no rule of law in Thailand, even though they started out by circumventing the law by doing questionable setups to “own” land.

It’s really not that surprising that if you deal with people of questionable morale, they might end up double crossing you.

My advice to OP: Buy a condo, you can own that 100% legally. Alternatively, accept that you are not the owner of the land, but setup a usefrukt or lease it for 30 years.

Having a random Thai citizen own 2% (to ensure you have the majority) is only legal if that person pays with their own funds. I also believe that creating a company with the sole purpose of giving property ownership to a foreigner is against the law, but the exact reference escapes me.

[inquisitive lobster]

HI Guys,

Thanks for the responses.

Some of these ideas are pretty good, but under B.O.I foreigners can own 100% company shares.

What I wanna know is in that instance if the company is 100% foreign, if this scam can still work? (Sorry for not being clear about that in the first place )

Kind Regards,

IL

[WorkingTourist]

Since you’re planning to start a BOI company, I assume that you’re starting a legit business and “owning land” is not the purpose of your company?

As for change of director, as doublephil already said, if we are talking about forged signatures from your partner(s), most things are possible, but these partners are breaking the law and even in Thailand, are likely to end up in jail, if detected.

Identity theft can happen in the West as well.

But as long as you do not incorporate a company with an indebted ex-bar girl through a dodgy lawyer then you should be fairly safe

[NickJ]

What a stupid waste of everyones time add on post.......Keep your money in your matress. Dont ever leave your home and never under any circumstane use an ATM card......do wear a foil hat.