Nominees Associated with a Gargantuan $2 Billion Condo Project
Chinese Group Under Fire for Suspected Land Grab in Thailand
In a recent crackdown by Thai authorities, a Chinese-led group is under scrutiny for allegedly acquiring 2 billion baht of land for a luxury condominium project in Rayong province. According to Pol Maj Gen Thatphum Jaruprat, Chief of the Economic Crime Suppression Division (ECD), this group situated thousands of miles away was planning to run the entire show - from management to construction - exclusively by Chinese nationals [1][2].
The police swooped down on three locations across Rayong and Chon Buri, marking the third operation following earlier raids in Phuket and Bangkok's Huai Khwang area. Authorities took possession of crucial documents and intend to slap charges against five board members and shareholders - both Thai and Chinese - along with supervising engineers, plumbers, and construction workers [2].
This construction project, involving ten eight-story condo buildings with 1,821 units, is a significant one, reflecting an estimated 60 million USD investment. Unfortunately, some construction work has already been underway on the Rayong's land plots, believed to be acquired by nominees for Chinese investors [2].
Preliminary investigations suggest that four registered Thai and Hong Kong companies, purportedly acting as proxies for Chinese investors, had purchased land in Rayong and Chon Buri. To mask the true ownership, one company reportedly held shares on behalf of another, forming a labyrinthine structure [1][2].
The Chinese superseded the entire project's stages, from engineering to construction, even launching their own concrete production firm to support the project [1][2]. A financial investigation unearthed over 500 million baht in transactions associated with a Hong Kong-registered company [2].
Seizing seven land title deeds, 48 bank passbooks with total balances of 72 million baht, a desktop computer, 2 laptops, 3 mobile phones, land purchase contracts, six company seals, and seven bank tokens, the ECD will submit the land data to the Department of Land. The department may force the companies to restructure their shareholding or have the properties auctioned off to Thai nationals [2].
This case exemplifies the intricacies associated with enforcing foreign ownership laws and the complexity of nominee structures in international real estate transactions. As Thailand is open to reforming foreign business ownership rules, this issue may set a precedent for future projects [3].
Additional Information:
- The luxurious residential complex consists of ten eight-story buildings, offering a total of 1,821 units [1].
- Chinese nationals spearheaded every stage of the project, from designing and engineering to construction, even launching their own concrete production company [1].
- One company took ownership of the shares on behalf of another in a complex layering of company shareholdings to hide the true ownership [1].
- The financial investigation discovered over 500 million baht worth of transactions linked to a Hong Kong-registered company [2].
[1] 'Thai police arrest Chinese-led group over luxury condo project', CNN, [2] 'Thai police arrest Chinese-led nominee group over luxury condominium project in Rayong', The Nation, [3] 'Thailand moves to loosen foreign business ownership rules', Reuters.
Investors from the finance industry, predominantly Chinese, are under scrutiny for their alleged illegal acquisition of real-estate in Rayong province, Thailand, as part of a significant 60 million USD investing project in the development of a luxury real-estate complex. The intricate nominee structures employed by several registered Thai and Hong Kong companies have been identified as an attempt to mask the true ownership of the land, complicating the enforcement of foreign ownership laws.
