Exim Bank reassesses loan to Burma

The Export-Import Bank of Thailand will open talks with the government on whether its four billion baht low inteerst loan to the Burmese government should be reviewed, Deputy Finance Minister Pruektichai Damrongrut says.


Pruektichai: Talks to start this week

Mr Pruektichai would consult Finance Minister Korn Chatikavanij and Exim Bank's legal team this week.

The Supreme Court's Criminal Division for Holders of Political Positions on Friday ruled former premier Thaksin Shinawatra had abused his authority with the Exim Bank loan to Burma.

Mr Pruektichai did not say how the bank would review the contract.

Exim Bank president Apichai Boontherawara said the bank would also assess the possible damage resulting from the contract before forwarding it to the finance minister. But he insisted the Burmese government was a good client which made regular repayments.

Exim Bank's soft loan to the Burmese government was one of five cases in which the Supreme Court ruled Thaksin abused his authority as prime minister.

The bank lent 4 billion baht to the Burmese government for 12 years at 3% interest, which is below its operating costs.

The Supreme Court said lending at an interest rate which was below the bank's operating cost was not an objective of the bank's establishment. The court estimated that lending at 3% over 12 years would cost the bank 670 million baht in damages.

Mr Apichai insisted the bank did not lose money from the lending, but said it would have to study the ruling thoroughly.

The court also ruled that Shin Satellite, a company in which members of the Shinawatra family were majority shareholders, benefited from the loan.

Burma spent it on buying telecommunications equipment and satellite services from Shin Satellite, better known now as Thaicom.

The court found the bank approved the 4 billion baht loan to Burma following an instruction by the Thaksin government.

Initially, it had opened a credit line of 3 billion baht for Burma, but Thaksin asked the bank to increase the credit line by one billion baht. After that, the interest rate on the loan was cut from 5.5% to 3%.
http://www.bangkokpost.com/news/local/33889/exim-bank-reassesses-loan-to-burma