The Department of Special Investigation (DSI) is looking into four Chinese companies suspected of setting up 40 firms illegally using Thai nominees.
Police said the firms were traced to four Chinese companies operating businesses not meant to be operated by foreign nationals.
Pol Lt Col Korrawat Panprapakorn, director-general of DSI, on Wednesday told a press briefing that law enforcement agents initially found nine Chinese financiers who hired Thai citizens to register the four companies.
The four Chinese companies either traded rice, dealt in real estate, constructed buildings or operated accommodation, all of which are prohibited from being run by foreign nationals.
According to the DSI, the companies' assets, which have been frozen by the authorities, are estimated to be worth 3.6 billion baht.
However, the citizenship issue could be deeper. Pol Lt Col Korrawat said the DSI's investigation into the matter followed the review of a prior criminal case in Chiang Rai's Wiang Kaen district, where police caught a local official allegedly working to formalise Thai citizenship requests by foreign nationals.
One suspect, identified as Apao Sae-shen, was found to have forged his fingerprint records and other identity documents submitted to the district office for citizenship.
Apao was later granted citizenship, which was later used to register the four Chinese companies, according to law enforcement.
According to the DSI, since the citizenship was acquired using illegal documents, the status is invalid, and the companies registered by Apao are now deemed foreign-owned.
The DSI also suspects that the four companies have rich financial backers pulling strings.
Pol Capt Wisanu Chimtrakul, director of Security Crime Bureau, noted three of the four companies did not have addresses. Shares in the four companies were in Apao's name, he said.
The DSI said the four companies are suspected of being connected to the 40 smaller firms, adding the smaller companies have a combined capital of 5.3 billion baht.
Pol Capt Wisanu revealed the DSI was investigating a total of 246 people suspected of being linked to the 40 companies.
The DSI decided to investigate the case because the forging of identity documents constitute a security issue, Pol Lt Col Korrawat said.