The Klongchan Credit Union Cooperative board yesterday approved a fund of 369 million baht to help members affected by the embezzlement of 12 billion baht of the company’s funds.
Klongchan chairman Phadej Mungthanya revealed the decision after a three-hour board meeting.
From a total of 369 million baht, the board agreed to provide 199 million baht in loans with a 6% annual interest rate to Klongchan members.
Members will be allowed to borrow no more than 10% of their deposits with the cooperative, but the maximum amount they can receive is 50,000 baht.
Klongchan will disburse loans in five instalments and the loans must be repaid within one year, Mr Phadej said.
Another 170 million baht will be made available for members who want to withdraw their deposits in full, he said.
Mr Phadej said the meeting also agreed to set up a new committee to oversee the rehabilitation of the cooperative.
The new committee will replace Klongchan's current executive board, which was forced to disband after a Central Bankruptcy Court order on Friday, which also ordered the cooperative to undergo a debt restructuring programme.
The Klongchan chairman said the cooperative will discuss details of the plan and other remedial measures to help affected members with the Legal Execution Department and the Cooperative Promotion Department.
On April 4, Klongchan will let its members know about any remedial measures it plans to take to help them recuperate their money, Mr Phadej said.
About 56,000 cooperative members will be allowed to submit request forms for debt repayment between April 7 and May 7, he added.
Klongchan will then submit the plan to the Central Bankruptcy Court for consideration, Mr Phadej said.
The court order against the cooperative came after Klongchan petitioned the court in August last year to start the restructuring process.
Klongchan cited liabilities of 21.9 billion baht for the proposed overhaul.
The court said on Friday that the debt incurred between 2009 and 2012 was caused by the transfer of money to invest in a business which was not in compliance with the Cooperatives Act.
Although the move was carried out by former board chairman Supachai Srisupa-aksorn, this should not hinder the cooperative from undergoing restructuring.
Despite the overwhelming debt, the cooperative is still functioning and the majority of creditors also support the rehabilitation, the Central Bankruptcy Court said.
State agencies also plan to assist in the rehabilitation, the court said.