Thaksin faces trial over KTB loan to real-estate firm

Thaksin and 26 others were accused of conspiring with executives from state-run Krung Thai Bank to approve Bt9.9 billion in loans to Krisada Mahanakorn, a major real estate company, and its subsidiaries.

The court’s Criminal Division for Holders of Political Positions has scheduled the first hearing at 9.30am on October 11.

Winai Damrongmongkolkul, spokesman for the Office of the Attorney-General, said the Office would deliver summonses to all 27 defendants. Although Thaksin is living in self-imposed exile, his legal domicile is still in Thailand, so his summons will be sent to his home address here.

The prosecution will work on the case based on evidence from the National Anti-Corruption Commission (NACC), he said.

Thaksin and his alleged accomplices – including bankers, the debtor companies and their management – were charged with jointly committing offences through their involvement in extending credit that failed to meet lending criteria and caused damage to the economy.

After the 2006 coup, the government formed the Asset Examination Committee to look into alleged graft violations involving Thaksin, including a complaint filed by the Bank of Thailand against Krung Thai Bank over three dubious transactions.

The AEC’s mandate expired before the case reached the trial stage. But the National Anti-Corruption Commission picked up on the AEC probe and ruled that it suspected foul play.

In June 2008, the NACC submitted the case for prosecution. A panel of state attorneys and graft-busters was set up to collect more evidence and build a stronger case. The Office of the Attorney-General in June decided to seek a court indictment with the central claim that then prime minister Thaksin abused his office to pressure the bank into granting loans to Krisada Mahanakorn despite the company’s poor credit rating.

To skirt the company’s bad credit standing, loans were allegedly arranged for proxy companies to channel the funds to Krisada Mahanakorn. The transactions turned into non-performing loans.

The defendants can be divided into three groups – Thaksin, as a political officeholder exerting influence over the loan process; Viroj Nualkhair, then managing director of the bank and the bank’s board of directors; and three companies, including Krisada Mahanakorn.

The prosecution contends that the doubtful loans were acts of corruption due to the losses inflicted on the state-run bank. 

The case will focus on three transactions, including a Bt500-million loan to RK Professional Co and a Bt8-billion credit line to Golden Technology Industrial Park, which also received a Bt500-million loan to acquire the land and Bt1.4-billion loan to develop the project.

The last transaction was financing for a Bt1-billion purchase of convertible preferred shares from Krisada Mahanakorn by Grand Computer Communication. All these transactions took place during Thaksin’s time as prime minister.