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Published on March 15, 2008

Financial sources said Chayotid had understood it was to be a meeting designed to bridge any misunderstanding or differences between SCB Securities and parent Siam Commercial Bank (SCB). Chirayu, who also serves as head of the Crown Property Bureau, chairs SCB. Anand, a former prime minister, serves as director of the bank and acts as chairman of both the compensation committee and the nomination and corporate-governance committee.

Details of their conversation were not disclosed, but after the meeting Chayotid decided to submit his resignation, financial sources said. SCB Securities executive director Supattanapong Punmeechaow followed suit with his own resignation.

Both Chayotid and Supattanapong have played key roles in turning SCB Securities into one of the country's top brokerage firms and investment-banking houses. The Shin Corp deal in 2006 alone earned Bt800 million in fees for SCB Securities.

Conflict between SCB Securities and the parent bank has been simmering for some time. Chayotid would like to strike a more independent course for the securities firm, while Vichit Suraphongchai, executive chairman of SCB, would like the subsidiary to come under closer supervision by the bank.

"Lately, the bank would have preferred SCB Securities to follow its directives. It does not hesitate to remind the firm that it is one of the bank's subsidiaries, but Khun Puen [Chayotid's nickname] feels he and his team have built up SCB Securities. Now the bank would like to take it away," said one financial source.

On Thursday, Vichit said the bank had been attempting to follow a Bank of Thailand provision requiring commercial banks to adopt consolidated supervision over their subsidiaries as part of prudential practice. This means SCB would have to adopt closer supervision over its subsidiaries, including SCB Securities. It follows that the bank would also like to send its representatives to sit on SCB Securities' board.

Siddhi Savetsila, Kamthon Sindhavananda and Palakorn Suwanrath, all of whom are SCB Securities board members, have also submitted their resignations along with others. The three distinct personalities also serve as members of the Privy Council. Financial sources said Siddhi, who is chairman of the securities firm, had been trying to strike a compromise by suggesting SCB Securities could gradually move towards working more closely with the bank.

Thanong Khanthong

The Nation