Latest development

April 5:  AEC subcommittee looking into Krung Thai Bank's loans would be able to use the complaint lodged by the Bank of Thailand with the police last year against KTB executives.

KTB last week lodged a formal complaint with AEC over the loans case, as requested, but it was incomplete because it incriminated only Thaksin, not its own executives and officials.

March 12: AEC ruled to appoint an investigative panel to probe Thaksin Shinawatra, his wife, his son and Krung Thai Bank officials over loans extended to the Krisada Mahanakorn Group.

The AEC subcommittee has said 32 people and five companies were involved in the loans which were alleged to to have cost the state up to Bt4.5 billion.

March 6: The AEC agreed to a suggestion by its subcommittee to incriminate seven politicians, eight Krung Thai Bank officials, four executives and five companies and their management for alleged involvement in the loan scandal.

 Sak said damages caused by extending the KTB loan to the Krisada Mahanakorn group was estimated at Bt4.5 billion.

 A Krung Thai Bank witness has testified to the subcommittee, incriminating Thaksin, his wife Khunying Pojaman Shinawatra and their son Panthongtae Shinawatra for ordering the bank to approve the loan.

 The panel found that some part of the loan extended to the group was paid as cheques in the name of Panthongtae and Manop, executives of How Come Entertainment, run by Panthongtae, and the mother of Kanchana Honghern, personal secretary to Pojaman.

Background:

The case has been under the spotlight since last year when the Bank of Thailand filed a complaint with the police charging executives and officials of Krung Thai Bank with improperly granting a Bt9.9billion loan to Golden Technology Industry Park Co, an affiliate of Krissada Mahanakorn Co.

The BOT alleged improper use of about Bt4.5 billion of the loan. Krung Thai Bank allegedly extended the loan by taking highly inflated collateral security.
Investigators have traced financial transactions of the loan and are trying to find out if there were other recipients and how the money was transferred. The findings will facilitate an inspection of share transfers by Krissada Mahanakorn. The team wants to find out who benefited from the transfers.

Three loan extensions were involved in the case:

1. A loan of Bt500-million extended to RK Professional on September 11, 2003.

2. A loan of Bt9.9-billion extended to Golden Technology Industrial Park on Sept 11, 2003. The company originally sought Bt 14 billion loan from Bangkok Bank for the real estate project placing a land with appraisal value at Bt4.5 billion as collateral. Later it redeemed the land and placed the same plot as collateral with Krung Thai Bank and received Bt14 billion-loan extension.

Key suspects and the charges:

1. Politicians and their family: Thaksin Shinawatra, Khunying Pojaman Shinawatra, Panthongtae Shinawatra, Manop Divari, who is father of Sitha Divari,former Thai Rak Thai Party spokesman.
2. Krung Thai Bank executives: Suchai Jaovisidha, a younger brother of former finance minister Suchart Jaovisidha, Viroj Nualkhair, former Krung Thai Bank board director 

3. A total of 118.5 million preferred shares worth Bt1.1 billion issued by Krisada Mahanakorn bought by Krung Thai Bank saw a drop in value to zero due to irregularities in the aquisition process. 

Key evidence

Krung Thai Bank witness has testified to the AEC subcommittee, incriminating Thaksin, his wife Khunying Pojaman Shinawatra and their son Panthongtae Shinawatra for ordering the bank to approve the loan.