Cooperative told to prepare rehab plan

THE BANKRUPTCY Court yesterday ordered the Klongchan Credit Union Cooperative’s board to prepare a rehabilitation plan to manage the company’s Bt21.9 billion debt – against Bt19.5 billion in assets – and aid its 56,000 members affected by the Bt16-billion embezzlement case. 

The rehabilitation plan would be submitted in three months.

The court said the debt problem stemmed from the cooperative’s then president investing in businesses that were not in line with the Cooperatives Act 1999. It said the investments, which should not be held against the cooperative’s bid for rehabilitation, took place from 2009-2012.

Most of Klongchan’s creditors backed the rehabilitation plan and state agencies were ready to provide assistance. 

The court found the cooperative’s request for rehabilitation lawful and without debt-evading intent, and as such it qualified for rehabilitation.

Department of Legal Execution (DLE) chief Reuwadee Suwanmongkol said her office would send the court order and a form for a repayment request to customers whose savings were affected by the embezzlement. They must return the completed form before May 7 or miss out on the chance to get their money back, she said.

She said the DLE would ask the creditors to ratify the rehabilitation plan before submitting it to the court.

Current cooperative chairman Padet Mungthanya told reporters after the court ruling that the board was expected to submit the plan in three months to the DLE, but could ask for two one-month extensions. He said the aim was to complete the rehabilitation in five years although the board could ask for two one-year extensions.

Padet said he was confident the plan would work, citing the Agriculture and Cooperatives minister’s promise to provide it Bt5 billion in aid and Wat Dhammakaya’s promise to return Bt684 million to the cooperative, with the first instalment of Bt100 million. 

He also said old debtors, who owed Bt2 billion in total, would start repaying money. Padet said the cooperative’s board would create a road map of the rehabilitation plan today. The affected customers could submit a request for a remedial payment – 10 per cent of the money owed to them or up to Bt20,000 per month – from today. The remedial payment should start next month, he added. 

Lawyer Decha Kittiwittayanan, representing creditors Rajavithi Hospital Savings and Credit Cooperative and the Office of Narcotics Control Board Savings Cooperative, said he would meet with other creditors to discuss their options. 

He said the first thing to do was file a request in one month for Klongchan to repay its debts and then monitor implementation of the rehabilitation plan to make sure it was satisfactory. 

Anti-Money Laundering Office chief Sihanart Prayoonrat said the agency would next week allow Klongchan executives to join its meeting to discuss the Bt5 billion in assets seized from former cooperatives chairman Supachai Srisupa-aksorn.

Padet met yesterday with Justice Minister General Paiboon Khumchaya and ministerial executives to thank them for acting on the case speedily so the cooperative could enter rehabilitation.