The Criminal Court has just issued a long-awaited ruling in relation to the first tranche of sales of distressed assets in the history of Thailand after the 1997 financial crisis.
The case involved legal action taken against the top executives of the Financial Sector Restructuring Authority (FRA): Amaret Sila-on, who chaired the FRA, and Vicharat Vichit-Vadakan, its former secretary-general. They were accused of allowing a unit of the US investment bank Lehman Brothers, the winner of a public auction, to use a tax-free mutual fund to purchase distressed assets.
As you may recall, the 1997 crisis was a close call for Thailand, which could have been forced to declare a debt moratorium. As the government had never been through a similar experience, it believed distressed assets should be put on sale as soon as possible in order to avoid the possibility of prices dropping even more.
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