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Dhammakaya: What does a bank failure look like?

About 100 victims of the Klongchan Credit Union Cooperative embezzlement rally outside the Cooperative Auditing Department in 2015 to demand legal action and repayment. A demonstrator holds a banner reading she is already 86 years old and doubts when she will ever be repaid. (Photo by Pawat Laopaisarntaksin)

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26 years to repay depositors at Klong Chan Credit Union, brought down by embezzled religious donations to Dhammakaya Temple.


Dhammakaya: What does a bank failure look like?

26 years to repay depositors at Klong Chan Credit Union, brought down by embezzled religious donations to Dhammakaya Temple.
Wichit Chantanusornsiri

Klongchan Credit Union was bankrupted by a former chairman who was also treasurer to Dhammakaya Temple and who embezzled huge sums that he handed over to the temple as "donations".


Klongchan Credit Union is a financial institution but it is not a bank and that is the problem.

The Credit Union will need some 26 years to fully repay its embezzled members.

Unlike Thai banks whose depositors are protected by deposit insurance and strict auditing by bank examiners, credit union members are just another group of creditors waiting in line to get their money back from the failed (bankrupt, insolvent) credit union.

After the credit union's failure, Thailand's central bank considered putting in place stricter oversight for credit unions and recently these plans have been resurrected (read today's article here).


The timeframe for repayment of 26 years is based on the rehabilitation plan for the credit union.

The rehab plan involves borrowing money to set up an investment fund and eventually repay the money to the credit union members, although many older members may not even be alive by then.

This is based on information from Phichest Wiriyaphaha, director-general of the Thai government's Cooperative Promotion Department.

Hopefully, there will not be another crooked chairman embezzling funds in the credit union's future.


Earlier, Klongchan planned to borrow from the Bank for Agriculture and Agricultural Cooperatives (BAAC) and the Government Savings Bank (GSB) but both state-owned banks turned it down.

The banks claimed that if they loaned the insolvent credit union money, they would need to set aside 100% loan-loss provisions because of the insolvency.


Although it may seem a little strange and convoluted, Klongchan Credit Union will borrow money from other cooperatives that are already its creditors.

These creditors of the insolvent credit union that are willing to lend it money, are standing in line like everyone else to get their money back from the credit union like everyone else but apparently are more confident about the credit union's future than the state banks are.

If successful, it is projected that the investment fund should yield a profit of about 450 million baht a year.

It had yet to conclude how much other cooperatives would agree to lend.

Hopefully, the lending cooperatives will put in place some solid auditing mechanisms to prevent another tragedy.


Embezzlement caused damage totalling 15 billion baht for the once-richest cooperative.

In March last year, a court order was issued for its rehabilitation.

So far, 1.2 billion baht has been repaid to its creditors.

Klongchan Credit Union has about 1 billion baht left in its accounts and some assets.


The embezzlement case is linked to fugitive Phra Dhammajayo, former abbot of Wat Phra Dhammakaya.

The 72-year-old monk allegedly received multi-million-baht so-called "donations" from the former management of the cooperative.


The ex-chairman of the credit union who is already in jail was also a former treasurer of the temple, a clear potential conflict of interest and a disaster that was waiting to happen. 

Security forces have been laying siege to the temple in Pathum Thani province for nearly a month in order to arrest the fugitive Phra Dhammajayo.


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abbot (noun): the head monk at a temple - เจ้าอาวาส

according to (prep): as stated or reported by somebody/something - ตามคำบอกเล่า, ตามรายงาน

allegedly : claimed to have done something wrong, but not yet proven - ที่กล่าวหา

apparently : based only on what you have heard or think, not on what you are certain is true; seemingly - ตามที่ได้รู้มา

arrest : (of the police or, in this case, soldiers) to take someone under control because they are believed to have committed a crime - จับกุม

audit : to officially examine the financial records of a company, organisation, or person to see that they are accurate - สอบบัญชี

bankrupt : without enough money to pay what you owe - ล้มละลาย

based on (verb): information or facts used to make a story, calculation, judgement or decision - ตั้งอยู่บน,ยึดเป็นหลัก

case : a matter that is being officially investigated or heard by a court - คดี

chairman : the person in charge of a committee, a company, etc - ประธาน

claim (noun): saying that something is true although it has not been proved and other people may not believe it - ข้ออ้าง ข้อกล่าวหา

clear (adjective): easy to see and understand - ชัดเจน

conclude : to decide that something is true after looking at all the evidence you have - สรุป

confident : being certain of your abilities or of having trust in people, plans, or the future - มั่นใจ

conflict of interest : a situation in which someone cannot make a fair decision because they will be affected by the results - ผลประโยชน์ทับซ้อน

consider : to give careful thought to something before making a decision - พิจารณา

cooperative : a business or farm owned and run by the people involved, with the profits shared by them - สมาคมสหกรณ์

credit union : an organization that is run like a bank but run by members who can obtain loans from their combined savings; a savings and loan cooperative - สหกรณ์ออมทรัพย์, สถาบันการเงินเครดิตยูเนียน

creditor : someone who money is owed to - เจ้าหนี้

crooked : dishonest - ไม่ซื่อสัตย์

deposit insurance : a system that ensures that the pay the depositors at a bank if the bank fails, this creates confidence and stability in a banking system -

director-general : the head of a large organisation, especially a public organisation - อธิบดี

disaster : an extremely bad situation - ความโชคร้าย

embezzle : to secretly take money that is in your care or that belongs to an organisation or business you work for - ยักยอกเงิน, ฉ้อโกงเงิน

embezzlement : the crime of secretly taking money that is in your care or that belongs to an organisation or business you work for - การยักยอกเงิน, การฉ้อโกงเงิน

former : of or in an earlier time; before the present time or in the past - อดีต, แต่ก่อน

fugitive (noun): someone who has been accused of doing something illegal and is trying to avoid being caught by the police - ผู้หลบหนี

fund (noun): investment fund, money collected together to invest in companies or projects -

in order to (prep): to cause something, to make something happen - เพื่อ, เพื่อที่จะ

insolvency : not having enough money to pay what you owe - ซึ่งล้มละลาย

insolvent : not having enough money to pay what you owe - ซึ่งล้มละลาย

investment (noun): the act of investing money in something - การลงทุน

linked : connected - เชื่อมต่อ เชื่อมโยง

loan : to lend something to somebody, especially money - ให้กู้

management : the people who run and control a business or similar organisation - คณะผู้บริหาร

mechanisms (noun): methods or systems for achieving something - กลไก, วิธีการทำงาน, วิธีการ

oversight : the state of being in charge or in control of somebody/something - หน้าที่ควบคุมดูแล

potential : possible in the future - ที่อาจเป็นไปได้

prevent (verb): to stop somebody from doing something; to stop something from happening - ขัดขวาง, ป้องกัน, กัน, กีดขวาง

profit : money that you make from selling goods and services after all your costs have been paid - กำไร

projected : calculated based on information already known - คาดคะเน, ประเมิน

promotion : activities done in order to increase the attendance at an event or sales of a product or service - การส่งเสริม

provision : a part of an agreement or law that deals with a particular problem - มาตรา, บทบัญญัติ,

provisions (noun): an amount of money kept to deal with problems and expenses in the future; accounting provisions -

recently (adverb): not long ago - เมื่อไม่นานมานี้, เมื่อเร็วๆ นี้

rehab : rehabilitation; the process of returning someone or something to a good or healthy condition, state or way of living - การทำให้กลับสู่สภาพเดิม, การทำให้กลับมาดีเหมือนเดิม

rehabilitation : making a system, building, etc., suitable for use again, i.e., bringing it back to a good condition - การฟื้นฟูสภาพกิจการ

repay : to pay back the money that you have borrowed from somebody - จ่ายเงินคืน, ใช้เงินคืน

repayment (noun): the act of paying back money that you have borrowed from a bank, etc - การชำระคืน, การจ่ายเงินคืน

resurrect : to bring back into use something that had disappeared, died or been forgotten - ทำให้คืนชีพ, ทำให้ฟื้นขึ้นจากความตาย

security forces (noun): members of the military (army, navy, air force, and similar organizations) or police -

set aside : to keep or save something from a larger amount or supply in order to use it later for a particular purpose - สำรอง

set up : to create something or start it - ตั้งขึ้น

so-called : said to be something but which may not be true - ที่เป็นที่รู้กัน (ซึ่งบางครั้งอาจไม่เป็นจริงก็ได้)

successful (adjective): achieved the goals you wanted to achieve or made a lot of money - มีผลสำเร็จ, ประสบผลสำเร็จ, ประสบชัยชนะ

timeframe (noun): the length of time something is supposed to last; the length of time before something can begin to be used - ในกรอบเวลาที่ระบุำไว้

tragedy : a very sad event that causes people to suffer or die - โศกนาฏกรรม


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