Chattawat gets 20-year term

Chattawat gets 20-year term

The Criminal Court yesterday handed down a 20-year prison term to a former member of the so-called Group of 16 after finding him guilty in connection with the defunct Bangkok Bank of Commerce (BBC) embezzlement scandal.

In its ruling the court found Chattawat Muttamara, 58, the founder of Siam Mass Construction Co and ex-member of the once-powerful political clique called the Group of 16, guilty on 31 counts of violating the 1992 Securities and Exchange Act. The court sentenced him to 155 years, or five years for each count.

Chattawat: Guilty on 31 counts

However, the maximum sentence he can serve under the law is 20 years. The court also fined him 31 million baht, or one million baht for each count, and ordered him to pay 732 million baht in damages to the defunct bank's creditors.

Chattawat was indicted in 2000 along with seven other people including former bank president, the late Krirkkiat Jalichandra, former assistant bank president Ekkachai Athikhomnantha, and politician Chuchart Harnsawat. Of the eight defendants, three were BBC executives and the others were customers, including politicians in the Group of 16, who applied for massive loans using land with inflated prices as collateral.

The court yesterday cleared six others due to lack of evidence and expunged the case against Krirkkiat because he is dead.

The bank's collapse symbolised an era of reckless and poorly supervised lending that helped lead to Thailand's economic crash in 1997.

The eight defendants were accused of collaborating to seek loans worth 570 million baht from the bank during January-June in 1994. The loans were sought for Siam Mass Construction, founded by Chattawat.

The group pledged six million shares in the company and 51 plots of land in Chiang Rai worth 425 million baht as collateral for loans. In 1995, Mr Ekkachai approved loans worth 655 million baht to the group without prior approval from the board.

Prosecutors said this contravened Bank of Thailand (BoT) rules which say that amounts exceeding 30 million baht must be approved by the BBC's board and be reported for approval to the BoT. The damage was estimated at 1 billion baht. The court said Krirkkiat approved the loan at Chattawat's behest despite his firm only having registered capital of 1 million baht.

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