Vichit said that as the committee has a direct role in the investigation into Kularb Kaew - a major shareholder in Cedar - the bank would not base its decision on the findings of the ministry's Business Development Department.

The department's findings as to whether Kularb Kaew is a nominee for Singapore's Temasek Holdings are not conclusive and its contents have not yet been verified, he said.

"At the moment, there is no official conclusion that Kularb Kaew is a nominee. There are only reports from newspapers. The bank will not use newspaper reports as the standard for its reaction to the issue," he added.

His comments followed a remark by SCB president and CEO Khunying Jada Wattanasiritham that the bank may sell its stake in Cedar Holdings if an ongoing legal study by the bank suggests it would be wise to do so.

She made the comment after news broke of the Business Development Department's apparent finding that Kularb Kaew could be a nominee of Temasek.

SCB is a shareholder in Cedar, the firm which acquired a controlling stake in Shin Corp Plc. The bank was also involved in issuing loans to finance the acquisition deal.

"The bank confirms that we did everything related this deal [Shin-Temasek] legally and we conduct banking business in line with correct practice. Because SCB is a commercial bank, we acted for commercial reasons," Vichit said, adding that the bank is ready to respond to queries about its actions in order to increase public understanding.

Vichit said the bank's investment in Cedar Holdings was aimed at the long term, with the telecommunications business effectively an infrastructure sector.

However, SCB is waiting for the official results of the Kularb Kaew investigation before making a decision about its investment in Cedar.

He said extending a loan to Suphadej Poonpipat, a shareholder in Kularb Kaew, to buy Cedar's stake was also correct banking business practice.

But the bank did not call for collateral from Supadej at the outset because his reputation in the financial sector guaranteed his financial status, Vichit said.

Clean loan extension is a bank's normal business, he said, but whether to lend and on what terms has to be decided on a case-by-case basis.

Asked whether SCB had lent the money on the basis of good governance, he in turn asked which cases had shown that the bank had acted without good governance.

"It's a problem because Thaksin [Shinawatra, caretaker prime minister] was the seller. If we had reached a deal with Telenor [the Norwegian majority owner of DTAC], would it have raised such criticism?" Vichit said.

Somruedi Banchongduang

The Nation