A row has broken out over the appointment of a new president for Siam City Bank (SCIB).

The Financial Institutions Development Fund (FIDF), the bank's largest shareholder, has insisted that the bank's board appoint the candidate who is rated highest by a selection committee.

The bank's chairman wants to appoint an insider, despite his having a lower score from the panel.

The row follows reports that Chulakorn Singhakowin, former president of Bank of Asia, now integrated into UOB Bank (Thai), received the committee's highest score. But there is pressure from  employees and the board for an insider to take the post.

The new president will replace Arun Chira-chavala, who resigned recently to accept responsibility for the bank's disappointing earnings.

Bank of Thailand Governor Tarisa Watanagase weighed in to the row yesterday by saying the board should agree with the selection committee and appoint the candidate with the highest score, because the selection process has been finalised according to criteria set by the board itself.

Her comment came after SCIB's chairman, Sompol Kietphaiboon, sought approval from the bank's biggest shareholder to appoint Lersuk Chuladesa, the first senior executive vice president.

Sompol argued that the criteria for selection should be adjusted to encourage continuity in the bank's business management. Besides, he told the FIDF, Lersuk's score was not far below Chulakorn's.

In a report to Sompol, the Bank of Thailand governor said the FIDF had to follow the selection process and accept the final result of the selecting committee, otherwise the fund could be accused of intervening in the bank's management.

She said the selection committee and the selection criteria had been set up under the central bank's supervision. As a result, the financial institutions' rescue fund cannot deny appointment to the highest-scoring candidate. There is no point in saying the two candidates' scores are not much different, Tarisa said.  "It would be a different issue if the selection criteria and process were not transparent," she said. "But the selection committee followed the right process. If the fund does not accept the result, it will mean we have overruled [the committee] and lack transparency."

Tarisa said she did not personally know the two candidates, nor the difference in their scores, but the FIDF had to maintain a firm stance and follow correct principles.

"If the board wanted to change any criteria, it should have done so before the process was finalised," she said, adding that the FIDF - as SCIB's biggest shareholder - could take action to counter a board resolution that did not follow the selection panel's choice. However, she believed the board would eventually agree with the fund's recommendation.

It was reported recently that government authorities had encouraged Chulakorn's candidacy, giving him a mission to merge with BankThai. Both SCIB and BankThai are state-owned through the FIDF.

The report raised widespread concern among SCIB's officers that they will be laid off under a management led by Chulakorn. As a result, the bank's labour union moved to oppose the outsider. It believes that Lersuk, the only insider applying for the president's post, will compromise and will not lay off staff.

Anoma Srisukkasem

The Nation