sibeymai

It has been suggested to me that this method is an effective way for a farang to maintain control of a Thai company. Do you agree ? Or are there other methods to maintain effective control while complying with Thai laws ?

Company shareholding constituted as Thai shareholder #1 (41%) as sole director, Thai shareholder #2 (20%), farang shareholder #3 (39%). Farang shareholder holds a signed undated unconditional letter of resignation from the director (Thai shareholder #1) and a signed undated voting rights proxy transfer from Thai shareholder #2 allocating voting rights to the farang.

The theory is that should the director perform any action which the farang disagrees with the farang can pre-date the director's resignation letter to invalidate the director's action. The director's resignation will prompt a shareholder vote for the appointment of a new director and with the proxy allocation from Thai shareholder #2 the farang controls 59% of the votes and may therefore appoint a director of their choice.

Is the above method legal under Thai law ?

Another method I have heard of is where the farang shareholder is allocated preferential voting rights on their shares when the company is formed. For example, Thai shareholding 80%, farang shareholding 20%. However, the farang shares are preferential and allocated 5:1 voting right. Therefore the Thai shareholders can exercise 80 votes and the farang 100 votes. In this method the farang needs to ensure the directors can not issue additional shares to offset the farang's shares so undated signed resignation letters for all the directors is also required.

Is this method also legal under Thai law ?

Any other legal methods for a farang to maintain control of a Thai company ?

Looks like a beauty, built in Argentina.

Could this become the first up market pickup on the Thai market ? Would you buy one ?

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