Credit: AFP

AsianFin -- Thai authorities have detained a senior executive of a Chinese state-owned enterprise-linked construction firm in connection with the collapse of a 33-story government building in Bangkok—marking the first arrest in a case that has raised questions about foreign construction practices and regulatory oversight.

Zhang Chuanling, a board member of China Railway No. 10 (Thailand) Co., was taken into custody on April 19 at a luxury hotel in Bangkok's Ratchadaphisek district, according to Thailand's Department of Special Investigation (DSI).

Zhang, who requested an interpreter and legal counsel during questioning, is now facing legal proceedings related to the partial collapse of the State Audit Office building—an incident that followed an earthquake on March 28 in neighboring Myanmar and was the only reported structural failure in Bangkok tied to the tremor.

The arrest is part of a broader investigation led by DSI's Police Lieutenant Colonel Yutthana Phraedam, who launched the probe on April 4. Authorities are examining whether China Railway No. 10 operated illegally in Thailand using nominee shareholders and formed a joint venture with local construction giant Italian-Thai Development PCL (ITD) to secure the building contract.

According to officials, the investigation has uncovered evidence of potential regulatory violations and corporate irregularities. Authorities have executed searches at four affiliated firms—Car Hub Co., PKW Joint Venture, W. and Colleagues Consultants Co., and PN Synchronize Co.—and seized 24 shipping containers stored beneath the parking structure of the collapsed building. These containers are believed to contain crucial documents linked to the ITD-CREC and PKW joint ventures involved in the construction.

Based on the collected evidence, the Thai Criminal Court has issued arrest warrants for Zhang and three Thai nationals who collectively hold a 51% stake in China Railway No. 10 (Thailand). The accused shareholders—Manas Sri-anan, Prachuab Sirikhet, and Sophon Meechai—face allegations related to the misuse of nominee structures and complicity in the disaster.

Zhang, who holds the remaining 49% of the company, is registered as the firm's director. The company is based in Bangkok's Thung Khru District.

The collapse and subsequent investigation have reignited scrutiny of foreign contractors and corporate governance in Thailand's infrastructure sector. Authorities say efforts are ongoing to locate and detain the remaining suspects for further questioning.

The fallout from the incident could have broader implications for cross-border construction projects, particularly as Chinese state-owned firms continue to expand operations in Southeast Asia under Beijing's Belt and Road Initiative.

The 33-storey State Audit Office (SAO) building in Bangkok, once envisioned as a landmark project showcasing Thailand's public infrastructure ambitions, came crashing down just minutes after a major earthquake struck the region. Though the quake's epicenter was located in Myanmar, far from the Thai capital, the building became the only high-rise in the country to suffer a complete collapse—raising alarm bells across the construction and regulatory sectors.

According to seismologists, the incident sets a disturbing precedent: the tallest structure to ever collapse due to an earthquake from such a distant epicenter.

Since the collapse, investigations have unfolded on two fronts. Thai police are leading efforts to determine the technical and criminal causes behind the structural failure and related casualties, while the Department of Special Investigation (DSI) is probing deeper into potential irregularities surrounding the building's construction and contracting process.

In early April, the DSI identified three key areas of concern in its preliminary inquiry. First, investigators are examining allegations that China Railway No. 10 (Thailand) Co., a key contractor for the SAO building, violated the Foreign Business Act by using Thai nationals as nominee shareholders to bypass foreign ownership restrictions in the construction sector. Second, there are suspicions that flawed or substandard construction materials, including steel from a previously sanctioned Chinese supplier, may have compromised the building's integrity. Lastly, authorities are looking into possible bid rigging during the procurement process for the SAO project.

Evidence gathered so far reveals that the three Thai shareholders linked to China Railway No. 10 (Thailand) have limited financial means and questionable ownership histories. One of the individuals reportedly holds only three shares in the company. All three have gone into hiding, with their whereabouts still unknown as of this report.

The DSI has also found that China Railway No. 10 (Thailand) is part of a broader network of 10 Thai firms operating in joint venture arrangements. Collectively, these companies have secured at least 28 government contracts worth more than 13.4 billion baht (approximately $370 million).

Authorities are intensifying efforts to scrutinize all state contracts associated with the joint venture. The investigation into the SAO collapse is ongoing, with both legal and regulatory implications expected to follow as more evidence emerges.