Thai bank to pay institute $63.2 million after embezzlement

Siam Commercial Bank yesterday agreed to a Bt1.5 billion (S$63.2 million) insurance payout to cover the money embezzled from King Mongkut's Institute of Technology LatKrabang (KMITL) via the financial giant's accounts.

Vichit Suraphongchai, SCB chairman, said a bank employee was alleged to be involved with the theft, so the bank wished to show responsibility for the damage done to the institute.

"It is SCB's view that if the case drags on, it would have a negative impact on the reputation of the bank and the public's confidence in the bank and the institute," Vichit said.

"Both institutes therefore agreed to end the matter and let police handle the case according to the law and justice. We will lend full cooperation to the police investigation," he said.

The chairman said the payment was neither an attempt to cover-up the incident nor protect wrongdoers.

He said the SCB and KMITL would jointly seek Bt1.5 billion in damages from the wrongdoers.

KMITL will again estimate its total losses and will return money to SCB if it were lower than Bt1.5 billion, he said.

SCB's total assets are worth Bt2.7 trillion, so the Bt1.5 billion payment will not affect its services to customers, he added.

Speaking at the same press conference, acting KMITL rector Professor Monai Krairiksh said that the institute would still bank with SCB as an act of gratitude.

"No one wanted the incident to happen and for the institute, it is an important lesson and preventive measures should be put in place to prevent a reoccurrence of the incident. It [the institute]'s financial transactions have to be stricter," Monai said.

Meanwhile, Thawil Puengma, a former rector of KMITL, declined to comment on the signatures on the withdrawal cheques related to the theft that police said were similar to his.

A senior police investigator, Colonel Kornchai Khlaikhluen, yesterday said a number of bank accounts used in transactions for large amounts of lost or stolen money were opened before Thawil ran the institute and were closed after his tenure ended without the KMITL board being told.

Meanwhile, a police source said the Bank of Ayudhaya had obtained proof from unspecified origins that proved the signatures on a number of withdrawal cheques linked to the scandal were forged and police would take action.

A former branch manager has been detained over the theft.

Monai did not say if the Bank of Ayudhaya would compensate the institute for money stolen from its accounts, but Bt50 million had been embezzled from one bank branch.

He said the bank should not "stay idle" over the matter, although the institute had not yet contacted it.