TERMCHAI Pinyawatn bitterly tendered his resignation last week as managing director of the financially-bankrupt Finance One Plc, which is bracing for a crisis today following its decision to seek a merger with the Thai Danu Bank, a financial source said.

The source said Termchai's resignation took place on Friday as the board of directors was meeting to discuss the best solution to save Thailand's largest finance company. Over a period of almost 16 years Termchai and takeover king Pin Chakkaphak orchestrated an aggressive, leveraged investment strategy to turn Fin-One from an obscure company into Thailand's largest financial empire.

Today both the Thai Danu Bank and Fin-One will formally notify their merger plan to the Stock Exchange of Thailand, which is expected to suspend public trading of their stocks.

''Termchai was not allowed to attend the board meeting on Friday. The board also barred Samrarn Kanokwattanawan and Taveeb Chardtumrong, two other managing directors of Fin-One, from attending the meeting as it feared that their presence might inhibit their decision to vote for the best interest of the shareholders," the source said.

Seeking a rescuer in the Thai Danu Bank amounts to a Fin-One admission that it is technically bankrupt. Mounting bad debts from its portfolios and a run on its liquidity over more than a month have dealt a fatal blow to the heavyweight company, whose 1996 assets topped Bt100 billion.

Pin and Termchai led Fin-One to glory during the hey-day of the bubble economy by snapping up finance and securities companies in highly successful leveraged financing. While Pin enjoyed most of the limelight as takeover king, Termchai was happy to play second fiddle as portfolio investment strategist.

With the stock market melting down and the economy going sour, however, this leveraged financing, which was the core of Fin-One's success, backfired, driving Fin-One into a cash-strapped corner until it decided to throw in the towel last week.

At the end of last year, Fin-One's liabilities reached about Bt88.40 billion, which included Bt46.02 billion in public deposits, Bt16.63 billion in interbank borrowings and Bt10.54 billion in foreign debts.

Today the finance and banking regulators are expected to announce emergency measures to prevent a crisis of confidence from wreaking havoc on the entire financial system. Over the weekend both Dr Amnuay Viravan, the finance minister, and Rerngchai Marakanond, the Bank of Thailand governor, expressed their support for the Thai Danu Bank/Fin-One merger, saying it would trigger a consolidation in the finance industry.

Yesterday Amnuay reiterated his support for the merger plan for both companies, saying that it would strengthen the financial industry and would not have any effect on confidence.

Last week there were also rumours that the Bank of Thailand would announce the non-performing loans level of 22 finance companies, to help the public differentiate financially sound finance companies from not-so financially sound finance companies.

BY THANONG KHANTHONG