The board of the Small and Medium Enterprise Development Bank of Thailand (SME Bank) has unanimously voted to oust president Manoorat Lertkomolsuk after his performance evaluation failed to meet requirements, adding to fresh setbacks.
An SME Bank staff member holds up a placard reading ‘Naris get out’ to pressure the bank’s chairman, Naris Chaiyasoot, to resign. Kitja Apichonrojarek
Staff are also pressing for the resignation of Naris Chaiyasoot.
Mr Naris said even though Mr Manoorat's dismissal will take effect 30 days after the resolution was passed, the board required him to take leave immediately and appointed Parichat Laothirasiriwong as the acting president.
The incumbent board in 2012 also fired Soros Sakornvisava from the bank's president title, citing the SME Bank's disappointing earnings as a rationale for the dismissal.
Mr Soros has been also under investigation for an alleged lack of transparency in the bank's lending practices and good governance under his reign.
The board's decision came amid a protest by bank employees, demanding the board clarify its conflicts with the outgoing president, allow the sacked president to continue working for at least six months and approve a four-month bonus to them. Otherwise, the bank's board should step down.
The state-owned bank has been mired in high non-performing loans and a weak financial position.
The lack of lending transparency practice was also cited as another cause that led to its financial troubles.
Apart from the poor performance, problems related to good governance practice such as fake reports and failure to protect the bank's interests prompted the board to dismiss Mr Manoorat, an SME Bank source said.
The board has also raised concerns over Mr Manoorat's recent refusal to approve computer procurement but instead renewed the contract to rent 1,700 computers for 40,000 baht apiece with the existing computer rental service provider, which is also a bad debtor of the bank.
Performance results weighted 70% of Mr Manoorat's performance appraisal, while good governance made up for the rest, the source said.
SME Bank swung back to a net profit of 407 million baht last year from a hefty net loss of 4.04 billion in 2012 thanks to higher interest revenue, lower operating costs and reversal of some of its loan-loss provisions after such bad debt has turned performing.
Its non-performing loans (NPLs) amounted to 31.5 billion baht or 33.7% of total credit at the end of last year. In 2013 it turned 9.48 billion baht worth of bad credit into performing loans.
SME Bank expects its NPLs will decline to 29.5 billion baht or 31.6% of loans outstanding after transferring some to Sukhumvit Asset Management.