Published on December 29, 2005
Former president of collapsed bank found guilty of embezzlement, 3 other execs get jail; expected to appeal. The Criminal Court yesterday found Krirk-kiat Jalichan-dra, the former president of the now-defunct Bangkok Bank of Com-merce, guilty of embezzling Bt2.5 billion from the bank.
He was sentenced to 20 years in jail and fined Bt18 billion.
Three other former executives of BBC were also found guilty in the same lawsuit, one of 24 cases filed against Krirk-kiat and his accomplices for their part in the infamous bank collapse. Jittasorn Pramoj Na Ayudhya, deputy director of the bank president’s office, MR Damrongdej Diskul, senior executive of BBC’s BIBF operations, and Supanee Sarasin Diskul, were sentenced each to a six years and eight months in jail and each ordered to pay a fine of Bt666,666.66. They were also ordered to repay some Bt6 billion to the bank. All the defendants are expected to appeal the verdict. Krirk-kiat is fighting a dozen criminal cases lodged against him in connection with the collapse of BBC, which caused public losses of more than Bt100 billion. The fraud occurred in 1994 and involved the false recapitalisation of BBC, which was edging toward bankruptcy due to the blatant mismanagement of its capital fund. Banking authorities ordered the bank, then headed by Krirk-kiat, to increase capital by Bt6.7 billion to keep its business going. On June 29, 1994, Krirk-kiat approved the sale of 260 million shares in BBC to outside investors, so that the proceeds could be used to shore up the bank’s capital base. The buyers, such as Inter-national Credit Brokerage Holding Inc and Olbi USA Inc, were of dubious backgrounds. Rakesh Saxena, then the bank’s financial adviser, acted as proxy for the share sale. Subsequently, both companies sold BBC shares to the stock market through Thai Fuji Finance and Securities, now also defunct. Rakesh is now in Vancouver seeking asylum. Thai prosecutors want to extradite him so he can be put on trial for the financial embezzlement at BBC. A court in Canada is due to hold its next hearing on Rakesh’s extradition in January. On July 7, 1994, Krirk-kiat approved a loan of US$126 million to National Credit Bank. This was followed by another US$50 million loan to Arcardia Capital Partners Inc and another US$50 million to AH Corporate Holding and Finance Inc. Rakesh signed the promissory notes issued by these two companies and pledged to BBC for the loans. The banking authorities investigated the money flows and concluded that the loans amounted to an attempt to embezzle money from the BBC because the loans were used to subscribe to bank shares. There was no fresh capital from outside sources to participate in the bank’s capital increase at all. Thawatchai Noonpakdee, Damrongsak Na Ranong and Danai Nasakul, who represent the Bank of Thailand, testified against Krirk-kiat and the other accomplices with weighty arguments. The Criminal Court viewed that the BBC share subscription, the loans and the money used to subscribe to the bank shares were acts undertaken by Krirk-kiat, Chittasorn, Damrongdej and Supanee, with Rakesh involved at every part of the process. According to court documents, Chittasorn, Damrongdej and Supanee claimed innocence. But the Criminal Court found that the share subscription, the loan approvals and the share sale all involved a process that took time – and it was impossible that these three defendants were not aware of the transactions.
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