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Sirin prepares defence against pending charge

 

SIRIN Nimmanahaeminda, the former president of Krung Thai Bank, is consulting his lawyers and former aides as he gets ready to face criminal charges levelled against him by the Bank of Thailand.

Sirin, younger brother of Finance Minister Tarrin Nimmanahaeminda, flew back from Chiang Mai on Friday evening to prepare his legal defence after hearing reports that Bank of Thailand governor MR Chatu Mongol Sonakul was about to file charges.

Rattakorn Nimwattana, assistant central bank governor for legal affairs, hinted the central bank would be relying on evidence in the PricewaterhouseCoopers’ report, which audited the Krung Thai Bank in August last year, to support charges against Sirin in relation to extending bad loans. He did not elaborate on the nature of the offences.

“Sirin is not making any move now and is waiting for the charges to be brought against him before making his defence,” a source close to him said.

Sirin has been caught in the bitter conflict between his brother and Chatu Mongol over how to pay off the Bt1.3 trillion debts of the Financial Institution Development Fund (FIDF), which bailed out the financial system.

With the central bank’s move to consolidate its accounting books, there might be some exchange gains from the process. Tarrin would like to use these proceeds to relieve the FIDF’s burden. Chatu Mongol disagrees.

The conflict reached boiling point last week when Luangta Mahabua, a revered monk, came out to attack the government over the possible misuse of his Bt1.7 billion ThaisHelpThais Fund, contributed to the international reserves of the central bank. Luangta Mahabua insisted the money be used as backup reserves to print money, not as compensation to the FIDF.

The Chuan government, and Tarrin in particular, are angry with Chatu Mongol, accusing him of trying to politicise the issue, which could undermine the popularity of the Democrat Party. There were rumours that the government planned to remove Chatu Mongol.

But, according to

A source said Sirin would defend his innocence because a panel led by Kamchorn Sathirakul, the former central bank governor, last year did not find any unusual lending practices in Krung Thai Bank, as any lending must be approved by the board of directors. In addition, the bank’s accounting book was examined by the Office of the InspectorGeneral.

According to PricewaterhouseCoopers’ report, the Krung Thai Bank under Sirin’s presidency in May 1995, granted a promissory note facility to Rujiras amounting to Bt75 million to purchase land for a personal residence. Due to the bank’s sloppiness in handling the document, collateral pledged by Rujiras against the loan was not properly registered at the office of the Land Department.

When Rujiras defaulted on her loan, she asked the bank to give her six months to get the money to service the loan. Krung Thai Bank, then under the chairmanship of Aran Thammano, agreed to her request, not realising that Rujiras and the Staco Group were facing financial trouble. The bank had extended Bt5.6 billion to Staco.

As a result, when Rujiras was sued by other banks, her improperly documented collateral pledged at the Krung Thai Bank was taken away by other creditors. This allegedly caused the bank damage.

According to PricewaterhouseCoopers: “Creditors, including Krung Thai, became aware of the group’s huge debts after the immediate death of Supojpong in a car accident in 1995. The group went bankrupt in the next year; the rest of the management could not run the business as well as Supojpong. Supplier credits were reduced and market share was lost to competitors.” PricewaterhouseCoopers indicated the pitfalls in the bank’s loans to Staco Group were lack of complete knowledge about the group and Supojpong’s financial position; lack of control or inadequate followup on the use of loans according to borrowing purposes; and loans being given to large scale projects whose success depended largely on one person.

 

By THANONG KHANTHONG

 

 

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