Several Thai government agencies are investigating two Chinese companies involved in the construction of the collapsed State Audit Office in Bangkok, with investigations now extending to numerous related companies, the Ministry of Commerce reports.
The probes target China Railway No.10 (Thailand) Co (CREC) and Xin Ke Yuan Steel Co, which are partly owned by Chinese nationals, holding 49% and 80% shares respectively, according to Commerce Minister Pichai Naripthaphan’s announcement on Thursday.
Preliminary investigations revealed potential breaches of multiple Thai laws, including those regulating foreign ownership in specific industries.
The Department of Business Development has relayed details about these firms to the Department of Special Investigation, which has committed to further probing these allegations, the minister confirmed.
CREC had collaborated with the SET-listed Italian-Thai Development Plc in the ITD-CREC consortium responsible for constructing the new State Audit Office, which failed during the Myanmar earthquake on March 28, and some construction materials were sourced from Xin Ke Yuan Steel.
It was discovered that CREC was linked to 13 other businesses while Xin Ke Yuan Steel was associated with 24 other entities. The DSI is now examining these connections, Mr. Pichai reported.
Deputy Commerce Minister Napintorn Srisunpang noted that the Department of Business Development is currently scrutinizing CREC and its 13 affiliate companies.
The Anti-Money Laundering Office is investigating the financial activities of these companies along with their shareholders and stakeholders. Meanwhile, the Revenue Department is reviewing the tax contributions of these firms and their shareholders.
The Thai Industrial Standards Institute is conducting tests on steel and other construction materials used in the project. Earlier tests by the Iron and Steel Institute of Thailand indicated that the steel supplied by Xin Ke Yuan Steel Co was below standard.
It has also come to light that the steelmaker’s Rayong factory had been shut down since January due to a separate violation, with 2,400 tonnes of steel confiscated.
Furthermore, the Department of Employment is checking the work permits of migrant workers at the site of the 30-storey State Audit Office project.
The Department of Industrial Works is inspecting all steel plants that supplied materials to the contractor.
The Department of Land is looking into the land ownership records of both Thais and foreigners involved in these enterprises, and the Comptroller-General’s Department is scrutinizing procurement and contract practices.
Mr. Napintorn mentioned that the investigations extend to at least 26 projects managed by 14 companies connected to CREC and Xin Ke Yuan Steel, aiming to avert potential harm to life and property.
China Railway Group, the parent entity of China Railway No.10, initially established its reputation by constructing most of China’s 45,000 kilometers of high-speed rail lines.
However, as domestic demand for new projects dwindled, the corporation and its numerous subsidiaries have broadened their horizons, eagerly pursuing new work.
Many of these international projects are linked to Beijing’s Belt and Road Initiative and other government-endorsed endeavors.
With the expansion accelerating, the company’s debt levels have surged. Its 2024 annual report revealed total liabilities amounting to $211 billion, a significant increase from $112 billion five years earlier, according to the New York Times.
Victor Shih, an expert in Chinese politics and finance at the University of California, San Diego, explained to the Times that with such a substantial debt load, “the pressure to generate cash flow to service the debt can be quite intense.”
