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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