ASEAN KEY DESTINATIONS
Corruption plagues corporate Thailand
Deunden Nikomborirak, a researcher with the Thailand Development Research Institute (TDRI), said the most prevalent practices involved parent companies siphoning resources to subsidiaries; accounting frauds to boost share prices or evade tax; and insider trading.
The Securities and Exchange Commission should increase penalties under the law as the existing fines of 500,000 to 1 million baht were too low compared with the damages done to shareholders. Therefore, fines should be a multiple of the damages incurred, said Dr Deunden, who conducted research into the issue jointly with the Office of National Anti-Corruption Commission.
"The SEC and the SET took legal action against corrupt companies but the damages have already been done to retail investors," Dr Deunden said.
SEC officials should be allowed to investigate the cases and send information to prosecutors as they have a relatively better grasp of corporate finances and accounting than the police, she said.
Dr. Deunden added that policymakers should promote understanding and disclosure by listed firms. Change should come from the bottom up rather than top-down as politics and business interests would be key hindrances.
"Investors should be increasingly careful during the pre-election period, as share manipulation by politicians is likely to occur," she added.
Tax evasion, she said, also came in various forms. Multinational and local companies may transfer profits to tax havens and nominees or understate import values. The use of arm's length prices to assess multinationals' corporate taxes has no legally binding effect and details of calculating costs are lacking.
Kittipong Urapeepatanapong, a partner with Baker & McKenzie, added that long statutory limits resulted in slow prosecution of corruption and, in some cases, failures to bring cases at all. "The government might consider stipulating firms that secure state contracts to declare their profits to mitigate tax evasion," he said.
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