Arrested China Railway Number 10 (Thailand)’s boss confirmed as China’s state enterprise official

Circulating capital of the company to run its businesses here, over Bt 2,800 million, is also a big loan taken from a subsidiary of China’s state-owned enterprise, the DSI has said

The Department of Special Investigation (DSI) brought Zhang Chunling, an executive of China Railway Number 10 (Thailand) (CREC), to the Criminal Court this late morning to ask for the extension of the detention period for another 12 days, and the court has approved its request, according to the department.

The court has also granted bail to Mr. Zhang, which is worth Bt 500,000, with a ban against overseas travel imposed alongside, according to media reports.

DSI’s director of the Consumption Protection Division and deputy head of the special investigation team investigating the case, Pol. Maj. Woranan Srilam, told Matichon Online that Mr. Zhang denied all the charges against him. He told the investigators that he is a state enterprise official who “was sent to invest in Thailand on behalf of the government”. He holds the company’s shares at 49%.

Pol. Maj. Woranan said the department was confirmed that Mr. Zhang is a state enterprise official as claimed. As reported by Isra News Agency, the Chinese Embassy in Bangkok submitted a letter to the DSI to confirm his status so the department did not oppose the court’s bail granting.

Pol. Maj. Woranan also revealed that the company’s circulating capital is a loan worth more than Bt 2,800 million, which was borrowed from a subsidiary of China’s state enterprise. This was transferred directly from a foreign bank to the company.

Pol. Maj. Woranan told the Nation News Program this evening that Mr. Zhang holds the shares on behalf of China Railway No.10 Engineering Group (CREC No.10), which the department earlier named as the company’s largest shareholder. CREC No.10 is a subsidiary of China Railway Group Limited (CREC) based in Beijing, China, which is China’s state-owned enterprise in mega project construction worldwide.

Pol. Maj. Woranan said the investigators have been working with the Chinese government’s representatives, and the Chinese government is expressing sincerity in addressing the issue. He said the offences are committed by individuals, and this should not have anything to do with the government’s part.

The department yesterday asked for arrest warrants from the court for four persons, including Mr. Zhang, also representing a legal entity, which is China Railway Number 10 (Thailand).

They are accused of being involved in the use of nominees to run businesses in the company, an act which violates the Foreign Business Act B.E. 2542 (1999). Foreigners who wish to run certain businesses listed under the act in Thailand must hold fewer shares than their Thai counterparts, 49% at most. These include construction.

Mr. Zhang is accused of being a foreigner who runs a business listed under the act (construction), and on behalf of the legal entity, he is accused of conspiring in the use of nominees, according to the DSI.

China Railway Number 10 (Thailand) won the contract as a joint venture with the Italian-Thai Development Plc. (ITD-CREC) in 2020 to build the State Audit Office, which had collapsed during the major earthquake on March 28. 

China Railway Number 10 (Thailand) has also been found to be a joint venture with 10 other Thai companies, which altogether have obtained 28 state contracts, worth over Bt 13,424 million. The DSI is now focusing on the case of the SAO building first, but it has asked other concerned agencies to look for any irregularities that may arise in those projects.

Its largest shareholder, CREC No.10, meanwhile, also has a joint venture with the ITD (ITD-CREC No.10), which won Contract 3-1, part of the High-Speed Railway Development for Regional Connectivity Project, Phase 1 (Bangkok-Nakhon Ratchasima) in 2023. It’s claimed to be a collaboration project between the Thai government and China, and is part of China’s ambitious Belt and Road Initiative (BRI). The contract is worth more than Bt 9,000 million. In mid-2023, Mr. Zhang represented CREC No.10 in a contract signing ceremony of the contract.

The DSI has invited the ITD for interrogation this week, but no ITD representatives have shown up yet. It’s also investigating possible bid rigging in the case and sees if it can prove that the use of nominees is a tactic to trick a state to grant contracts, an act which violates Article 7 under the Concerning Offences Relating to the Submission of Bids to Government Agencies Act B.E. 2542 (1999).

No official Chinese representatives have responded to the arrest so far.

The three Thai shareholders, meanwhile, have turned themselves in after Saturday’s arrest warrants. They have denied all the charges.

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