Thai cabinet to look at evidence of BOT bailout misconduct

The Thai cabinet will today examine evidence central bankers played into the hands of favourites when they pumped hundreds of billions of baht into scores of dying financial companies.

The government may yet file criminal charges against Bank of Thailand officials if it decides it was not merely gross incompetence and indecision that cost the country so dearly, a government official said last night.

A special commission lead by former bank governor Nukul Prachuabmoh found that the central bank's rescue arm, the Financial Institutions Development Fund (FIDF), bent over backwards to help certain companies.

The commission's report, to be reviewed by the Cabinet today, is expected to recommend the bank is stripped of powers to regulate financial institutions and instead focus on monetary and foreign exchange policy.

Most expert observers still give the three governors who have resigned since the middle of 1996, as well as other central bankers, the benefit of the doubt by assuming they were just out of their depth when the decade-long boom ended abruptly with the devaluation of the baht last year.

But there have been suspicions some of them had the opportunity to favour friends and enrich themselves.