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A recent news report said the government would consider the wrongdoing of the Bank of Thailand in its handling of BankThai's recent recapitalisation and particularly probe the performance of Governor Tarisa Watanagase on this issue.

The central bank warned that the report would lead to a fall in the value of BankThai's shares, while the fund has been trying to unload its stake in BankThai to a potential investor. The FIDF is a major shareholder of BankThai.

Tongurai Limpiti, senior director of the central bank's Fund Operation Department, said the FIDF had slashed BankThai's par value from Bt10 to Bt3.75 before participating in the rights offering for last January's capital increase.

"In fact, there was no difference whether we reduced capital or not, because the book value took into account all losses," she said.

According to the Stock Exchange of Thailand, the bank's shareholders agreed to reduce par value from Bt10 to Bt3.75, which was effective for trading on July 16 last year. The number of shares remained unchanged.

Phong-Adul Kristnaraj, senior director of the Bank of Thailand's Financial Institutions Monitoring and Analysis Department, said the central bank had injected money into BankThai to help it continue its business.

It also required the bank to set aside provisions to cover losses from investments in collateralised debt obligations and to recapitalise when the bank's BIS (Bank for International Settlements) ratio declined.

A central bank source said the FIDF had bought the stake at the agreed book value for a certain period. It could not change the agreement, although BankThai's book value later declined.

Deputy Prime Minister and Finance Minister Surapong Suebwonglee said the ministry would ask the central bank and other agencies for information about BankThai's recapitalisation and performance. The ministry wants to find reasons for and ways to solve the bank's problems in the future.

"I acknowledge that the bank can continue its business without any problem but will request the information from the central bank [anyway]. Supervising the bank is not the ministry's job but that of the central bank. Everyone has already recognised the fund's burden of Bt2.2 billion, but I can't specify who must take responsibility," Surapong said.