The right of shareholders to request the appointment of inspectors to inspect the affairs of a company is prescribed in the Thai Civil and Commercial Code and the Public Limited Companies Act (the "Act"), but some provisions remain unclear.
For clarity, the Ministry of Commerce (the "MOC") therefore issued the regulation on the inspection of the affairs of limited companies and public limited companies (the "Regulation") on 6 September 2018.
The Regulation clarifies and prescribes the procedures for minority shareholders to file an application requesting the appointment of inspectors to examine the business and financial standing of a company, and to report the findings. The Regulation also determines the amount of security for payment of inspection expenses, in accordance with current circumstances.
Under the Regulation, the following shareholders are entitled to request the appointment of MOC officials as inspectors to inspect the company's business and financial affairs – by filing an application in writing, indicating the matters for inspection, and placing the security for payment of the inspection expenses:
- shareholders holding not less than one-fifth of a limited company's shares
- shareholders holding not less than one-fifth of a public limited company's sold shares; or
- not less than one-third of the total number of a public limited company's shareholders.
Upon appointment, the inspectors shall notify the company in writing on their appointment and for the company to submit documents, including financial statements, accounting documents, and other documents concerning the company's affairs. In addition, under the Act, the inspectors can also enter the office or any premises of the public limited company during its office hours and instruct the public limited company's directors or other persons as prescribed in the Act to provide statements.
If the company fails to comply with the inspectors' orders, it may be subject to further legal proceedings.
After the inspection, the inspectors are required to make a report and submit the report to relevant authorities for further process