The Supreme Court yesterday handed down a two-year suspended sentence to the heads of the now-defunct Financial Sector Restructuring Authority (FRA) for malfeasance in connection with the agency's sale of assets after the 1997 financial crisis.
Amaret: Mishandled auction after '97 crisis
Former FRA chairman Amaret Sila-On, 83, and his former secretary-general, Vicharat Vichitvadakan, 69, were given a two-year prison sentence, suspended for three years, and fined 20,000 baht each for their handling of the FRA. The FRA was set up to sell assets from 56 defunct finance companies.
The Supreme Court's ruling overturned an Appeal Court judgement in June 2014 that acquitted the two defendants on the grounds that no damage had been done to the state.
In September 2012, the Criminal Court found them guilty and sentenced them to two years in prison and fined them 20,000 baht each. The jail sentences were suspended for three years because of their contributions to the country.
Both were indicted in September 2008 for malfeasance in connection with the auctioning of assets from 56 closed financial institutions in 1998.
According to the Supreme Court's ruling, Amaret and Vicharat had given investment bank Lehman Brothers an advantage in its bid for assets, as Lehman Brothers (Thailand) Co was the FRA's adviser.
Lehman Brothers won the auction with a bid of 11.5 billion baht compared with the assets' original value of 24.62 billion baht.
The FRA also postponed the auction from July 30 to Aug 13, 1998, allowing Lehman Brothers time to set up the Global Thai Property Fund to buy the assets on its behalf in a bid to bypass taxes.
The court also found that Lehman Brothers failed to seal the purchase deal and pay 20%, or 2.3 billion baht, of the price within seven days after the auction as originally required.
Instead, the FRA allowed the property fund to seal the deal despite it not being listed as a contender.
Amaret, a former commerce minister, told the court that he had worked in the public's interest and in return he was needlessly being punished for it.
The FRA was a body set up after the 1997 financial crisis by the Chavalit Yongchaiyudh administration to manage the assets of the shuttered 56 finance companies. When the Chuan Leekpai administration took power, it appointed Amaret to head the FRA.
Criticism abounded that the body failed to separate bad assets from good ones before proceeding with auction sales and it issued regulations that favoured foreign-owned firms.
The FRA fetched about 190 billion baht from asset sales against an original value of 851 billion baht.
The FRA's poor prices were slammed by critics of the Democrat Party. The issue was also believed to have contributed to the party's defeat to the now-defunct Thai Rak Thai Party at the election that followed.