Krungthai Bank (KTB) has denied reports it is preparing to seek royal pardons for 10 of its former executives and two current employees convicted of being involved in approving more than 9.9 billion baht of unsecured loans.
The loans were made to subsidiaries of property developer Krisdamahanakorn from 2003-2004.
On Thursday, Krisdamahanakorn told the bank it might not be repaying the nearly 10 billion baht it got in the loan deal, if Krungthai Bank is able to seize and sell the property pledged as collateral.
Krisdamahanakorn chief executive Yongyut Chaipromprasit said the company had the land appraised by SET-accredited firm Knight Frank Charter (Thailand). It reportedly said the 4,323 rai of land mortgaged with the bank was worth 12.32 billion baht as of Feb 2, 2012.
Mr Yongyut said the bank should sell the land, and if it can, that would discharge the debt.
So far as the trial and sentence, KTB, as the plaintiff, is not eligible to seek a royal pardon even if it wanted to do so, according to KTB president Vorapak Tanyawong.
"The convicted executives have the right to do so [seek a royal pardon], but it is not being sought by the bank," he said.
The 12 were among 24 offenders found guilty by the Supreme Court's Criminal Division for Political Office-Holders on Wednesday.
Among those convicted were former KTB president Viroj Nualkhair and former bank chairman Suchai Jaovisidha, who were both sentenced by the court to 18 years in prison for malfeasance.
Mr Vorapak said he believed the bank's staff felt anxious and he was concerned about their morale after the ruling because KTB is a commercial bank where lending is common practice.
The president was trying to boost morale of the bank staff and encourage them "not only to be honest, but also be cautious".
Credit approval is a science and it requires principles and reasoning to ensure lending is appropriate, he said.
Additionally, he said KTB has been continuously developing its risk management system, especially credit approval, to ensure its transparency and good governance.
The credit approval system has been improved to restore the confidence of clients, he added.
Meanwhile, Corrections Department chief Withaya Suriyawong said 16 of the male offenders convicted in the case, who started their jail terms at the Bangkok Special Remand Prison on Wednesday, appeared stressed as they did not expect the prison terms. Most of them are elderly and suffering from congenital illnesses, he said.
Prison staff were giving them advice to come to terms with life behind bars because the case has ended and they cannot lodge further appeals, he said.
During the day, Mr Withaya said the prisoners would be advised to gather in the education zone where they can practice dhamma to ease their stress.
Being prominent figures does not entitle them to special treatment, he said.
The detainees have the right to ask for a royal pardon in the same way other prisoners do, but they have to compile the necessary documents and send them to the department for consideration, Mr Withaya said.
By law, inmates who have demonstrated good behaviour may ask for a royal pardon.