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Paying the price for following the 'phooyai'

 

Jaroong Nookwun's honesty has never been in question, yet his moral integrity is now being challenged.  Vatchara Charoonsantikul and Thanong Khanthong report.

 

Jaroong Nookwun, the embattled deputy governor of the Bank of Thailand, is appealing to heaven for justice, yet heaven may abandon him if he is to give direct answers over his role in the Bangkok Bank of Commerce scandal from the time he was loyally serving Vijit Supinit, the former BOT governor.

Personally, nobody dares to question Jaroong's honesty. He is a typical Thai gentleman. He lives a frugal life and has been giving dedicated, faithful service to the BOT for the past 25 years.

''I love this institution very much because it is this institution that sent me to study abroad. I have been working here for quite a long time. Let me ask just one thing of you. Don't interfere with this institution too much," said Jaroong, upon learning that he had been temporarily suspended from his position for a full month, pending an inquiry over his responsibility in the BBC debacle.

Some BOT officials reacted to this suspension order, signed by Prime Minister Chavalit Yongchaiyudh, with shock and anger. With tears brimming in their eyes, they extended their sympathy to Jaroong, the most humble of career officials to climb to a high-ranking post at the BOT. Some of them dressed in black yesterday to protest what they considered to be unjust treatment against the man in whom they have unfailing trust.

Jaroong's predicament should be looked at from two different angles his role during the cover-up of the BBC's Bt79-billion bad debts, and his role after the BBC scandal broke in May 1996.

However, his suspension amounts to yet another big casualty at the BOT, which in December 1995 lost Ekamol Khiriwat, the respected deputy governor who was also secretary-general of the Securities and Exchange Commission; and in July 1996 lost Vijit, the governor.

Jaroong should be given the benefit of the doubt over the BOT's failure to prosecute Krirk-kiat Jalichandra, Ekachai Athikomnantha and Indian-born Rakesh Saxena over allegations of their repeated violations of banking laws. Some may argue that suing rogue bankers is part of administrative procedures that could have missed the queue along the way, given the hundreds of matters preoccupying Jaroong and his BOT colleagues at the time.

The police were also involved in the process. The back-and-forth communication to determine the statutory period of the case might have created a misunderstanding among the two parties, who needed to wrap up the matter and present it to the public prosecutors who would then forward it to the Criminal Court for a full trial.

Yet on second thoughts, a scandalous case of these historic proportions should not have slipped from the grasp of the BOT authorities and the police, who simply could not side-step their joint responsibilities. Vinai Pao-In, the chief of the Economic Crime Investigation Division, and his deputies, have also been moved to inactive posts, pending a parallel inquiry.

The prime minister could not act otherwise. The rules of law in this country would be the subject of international mockery if the top suspects in the plundering of the BBC were not prosecuted, simply because the BOT officials and the police failed in their responsibilities. The message was also aimed indirectly at Moody's Investors Service, the US rating agency, which has placed Thailand's long-term sovereign debts on a credit watch for a possible downgrade.

Moody's, too, has expressed its unease with the regulatory authorities' handling of the BBC scandal.

Throughout the episode, Jaroong was a faithful subordinate to his boss, Vijit. Since Vijit was not around, Jaroong and his two colleagues automatically became the target of investigation. It was Jaroong who handled most of the BBC affair before it was passed on to Vijit for final deliberation. As assistant governor at that time, he oversaw the supervision and examination of financial institutions.

One could dwell on the technical arguments over whether Jaroong, who sometimes signed letters in Vijit's absence, should have notified the police over the statutory date of the case on January 19 last year, when he was informed by one of his subordinates that the management of BBC had been found guilty of repeatedly flouting the banking law. This document was not forwarded to the police, who might or might not have been aware of it.

The police, as they argued, presumed that February 22 should be the starting date of the statutory period, which would last only one year, because on that day the BOT informed the chairman of BBC that it had uncovered rampant violations of the banking law. So the police missed the original bus, having worked slowly as most people would like to think or speedily, as the police claim in their defence.

Krirk-kiat, Ekachai and Saxena were off the authorities' hook in the prosecution based on banking laws. Yet the incident, which appeared to work in the suspects' favour in the beginning, turned the spotlight back on them. Now criminal prosecution against the three suspects in 24 or 25 cases will catch the full attention of the BOT, the police, the public prosecutors and the Criminal Court. Nobody can afford to make another blunder now.

It is this kind of technicality the missing link in the BBC affair that an inquiry panel, joined by Panas Simasathien, a former permanent secretary for finance, and Chavalit Thanachanan, the former governor of the BOT, will try to uncover. Their task should be completed in one month.

Jaroong's role in the pre-investigation stage of the BBC affair was more dubious, if not less sympathetic. The BOT documents showed that its officials learned about problems and management frauds inside BBC as long ago as 1992-1993. Back then, the doubtful debts of BBC stood at only Bt11 billion. Yet as governor, Vijit did nothing to stop the madness of the management plundering of the bank, which eventually racked up Bt78 billion in bad debts by the end of 1995.

Jaroong should have seen all the BOT documents and thoroughly examined the financial position of the BBC. It was Phenwan Thongdeethae, a keen auditor, who suggested to Jaroong and Vijit that the BOT take drastic action against the Krirk-kiat management.

Unperturbed, Vijit sat on the BBC's can of worms. Jaroong must have thought that the BBC affair rested in the hands of his boss who had the final say, so he apparently went along with Vijit in the cover-up. On several occasions, he gave public assurances, echoing the governor's words, that the financial status of BBC was of no concern.

When the BOT's documents showing BBC's rotten financial situation were made public by Suthep Thuagsuban, the Democrat MP from Surat Thani, in May 1996 during a no-confidence censure debate, Vijit could not brush aside the responsibility. He was subsequently sacked by then prime minister Banharn Silapa-archa.

Jaroong was not caught in the net because he was simply following the instructions of his boss. In Thai culture, sometimes you are allowed to make an excuse by showing a total lack of responsibility. You simply argue that ''dogs will not bite you if you are following the footsteps of the phooyai the senior figures".

In Jaroong's case, he has been a faithful follower of the phooyai. His reward was a promotion to deputy governor. Yet the ''following-the-phooyai" strategy is about to haunt him and challenge his integrity, opening up more wounds at the scandal-plagued Bank of Thailand.

 

 

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