President ousted for defying orders

Naris Chaiyasoot, chairman of the board of directors, yesterday said it voted to oust Soros by ending his employment contract without paying any remuneration.
The board may also take legal action to demand compensation from him if SME Bank was damaged by his management.
Naris, who is also director-general of the Treasury Department of the Finance Ministry, said Soros extended loans Bt6 billion beyond those approved by the board, which is expected to cause a revenue loss of Bt311 million.
The controversial loans were made in 2009 when the previous government was trying to help small and medium-sized enterprises affected by the global financial crisis keep their employees.
The Finance Ministry, the Labour Ministry and the Social Security Office initiated a soft-loan scheme to support SMEs. The SSO deposited money in SME Bank and received interest of 1 per cent per annum, while the bank made loans to enterprises at 5-per-cent interest.
Bank director Pichai Chunhavajira said Soros had issued many orders to his staff to lend up to Bt22 billion, overriding the board’s resolutions. Of this amount, the bank inked loans worth Bt19 billion and disbursed between Bt13 billion and Bt14 billion to borrowers, he said.
Because of the low interest rate and expected rise of non-performing loans from this lending, the bank stands to lose a large sum of money, he said.
According to a preliminary investigation, revenue forgone is expected to be at least Bt311 million, he said. And the bad loans are expected to rise quickly, as some borrowers used the money to buy land instead of funding their businesses.
The findings of the investigation corresponded with those of the Bank of Thailand, which had warned about rising bad loans due to negligent lending by SME Bank.
According to Pichai, Soros defended himself by claiming he executed lending according to government policy to support SMEs.
Soros tendered his resignation a few weeks ago. His employment contract was due to expire next February.
Asked about the board’s responsibility, Naris said he and Pichai had just been appointed at the end of last year.
The board will set up a rehabilitation team to restructure its management and operations.
Naris and Pichai said SME Bank had not developed a better management system partly because it is relatively new. They said it would take about three years to restructure the bank.