SME Bank president resigns

Economy July 26, 2012 00:00

By Wichit Chaitrong
The Nation

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Soros Sakornvisava, president of the Small and Medium Enterprise Development Bank of Thailand (SME Bank) who has been under the Finance Ministry's investigation into his past actions, yesterday tendered a surprise resignation to Deputy Finance Minister V

"It's a surprise," the minister said, adding that Soros cited a health problem.  

Meanwhile, SME Bank Chairman Naris Chaiyasoot said the resignation is not yet approved, due to the absence of a physical fitness document from his doctor. Without a good reason, the bank may demand for compensation from Soros, he added.
Soros wanted the resignation to take effect on October 4. Under his employment contract, to avoid paying compensation, he must submit the resignation 3 months in advance. 
The bank's executive chairman, Pichai Chunhavajira, said Soros is under investigation for mismanagement which cost Bt1.2 billion in financial loss in the first half of this year.
Following the BOT's recommendation, the board looked into the bank's finance and found that after a small profit in 2009 when Soros took office and in two subsequent years, SME Bank reported a huge loss in 2012. 
Soros was also accused of approving soft loans beyond his authority, which was in violation of the board of directors' order. 
For example, while the board approved a Bt7 billion loan budget for an employment-supporting scheme, the bank has so far loaned Bt19 billion under the scheme. 
Pichai added that Soros also responded slowly to the Bank of Thailand's recommendations on measures to tackle non-performing loans. 
Against some 3 per cent of NPLs among commercial banks, SME Bank's NPLs of about Bt130 billion account for 18 per cent of outstanding loans, Pichai said.
SME Bank is one of specialised financial institutions established to support the government's policies, which could incur losses. The current and past governments have been criticised for causing financial loss to the state-owned bank.