SCB compensates KMITL for 1.5 billion baht loss

[webfact]

SCB compensates KMITL for 1.5 billion baht loss



BANGKOK: -- Siam Commercial Bank today reached agreement with King Mongkut Institute of Technology Ladkrabang (KMITL) to compensate the loss of 1.5 billion baht from the embezzlement scam.

At the press conference to witness the MOU signing between SCB chairman Vichit Surapongchsi and KMITL rector Monai Krairiksh, SCB agreed to compensate the loss of 1.5 billion baht when it was also found that the bank staff was also found to have connection in the embezzlement scam.

The compensation to the institute was to show the responsibility of the bank to its customer and also its adherance to good governance, said the bank chairman.

The bank chairman also stated that the bank will also join the institute to be co-plaintiff to file civil suit to demand compensation from the wrongdoers, and cooperated in the police investigation.

So far eight persons who included former executives of KMITL and individuals were arrested and three others still at large for their involvement in the embezzlement scam.

A key suspect with financial experience, Kittisak Mudtujad, is still hiding in the UK and the Crime Suppression Division has asked the Foreign Ministry to seek his extradition.

Source: http://englishnews.thaipbs.or.th/scb-compensates-kmitl-for-1-5-billion-baht-loss


-- Thai PBS 2015-02-27

[Stradavarius37]

SCB covering its ass....lmao

[NeverSure]

Any loss like that a bank takes has to come out of its own capital, i.e. stock sales and retained earnings. It can't use its deposit accounts because that's customer money.

I haven't looked to see how much liquid capital (capital not counting buildings, equipment, etc.) that SCB has but this is a real hit.

I wonder if there is an acceptable capital to deposit ratio that meets international standards in Thailand?

Edited February 27, 2015 by NeverSure

[smutcakes]

Will any of the top brass fall on their swords over this? Seems like they are just going to pay out the money, and hope it goes away.

I would of thought shareholders would like some information about how this event has been allowed to happen, and the how's, whys, what's the will do to prevent a repeat in the future.

[kingalfred]

Wow SCB account holders and other investors be ok with this . 1,000,500,000 baht paid out!

[NongKhaiKid]

Will any of the top brass fall on their swords over this? Seems like they are just going to pay out the money, and hope it goes away.

I would of thought shareholders would like some information about how this event has been allowed to happen, and the how's, whys, what's the will do to prevent a repeat in the future.

Taking responsibility isn't a Thai trait so they will be hoping the cash payment makes it all go away. The BIB haven't been displaying much urgency in the enquiry with the usual summons procedure for suspects and witnesses and how about the suspect who legged it ?

Might be nice if some major clients asked questions and indicate no answer or less than believable ones will see them taking their business elsewhere.

Edited February 27, 2015 by NongKhaiKid

[siampolee]

NeverSure post # 3

Any loss like that a bank takes has to come out of its own capital, i.e. stock sales and retained earnings. It can't use its deposit accounts because that's customer money.

I haven't looked to see how much liquid capital (capital not counting buildings, equipment, etc.) that SCB has but this is a real hit.

I wonder if there is an acceptable capital to deposit ratio that meets international standards in Thailand?

Great sentiments however this is ''Banking Thailand.''

Were you here when this hit the fan ? I was

www.nationmultimedia.com/.../BANGKOK-BANK-OF-COMMERCE-Co

www-cgi.cnn.com/ASIANOW/asiaweek/96/0607/biz3.html

ase.tufts.edu/chemistry/kumar/ssc/html/SSCN/4.html

[Anthony5]

Any loss like that a bank takes has to come out of its own capital, i.e. stock sales and retained earnings. It can't use its deposit accounts because that's customer money.

I haven't looked to see how much liquid capital (capital not counting buildings, equipment, etc.) that SCB has but this is a real hit.

I wonder if there is an acceptable capital to deposit ratio that meets international standards in Thailand?

Last time I checked there was still 237 Baht in my SCB account. I guess I better withdraw it before it's too late.

[Old Man River]

Any loss like that a bank takes has to come out of its own capital, i.e. stock sales and retained earnings. It can't use its deposit accounts because that's customer money.

I haven't looked to see how much liquid capital (capital not counting buildings, equipment, etc.) that SCB has but this is a real hit.

I wonder if there is an acceptable capital to deposit ratio that meets international standards in Thailand?

I am not sure if E & O insurance covers this, but it might.

[laolover88]

Why are they not compensating me for the 2MillionB my 'wife' stole from them by pretending " No! I not marry:"??.....My happiness is they got a house and land worth maybe 1 million which they wont be able to sell for 30 years and the 'wife's credit rating is 0.!!

[Sviss Geez]

SCB covering its ass....lmao

What's so funny about the bank doing the right thing and compensating the Institute? SCB is co-operating with KMIT and the investigators to prosecute all those found to have committed offences. That's not "covering it's arse".

You'd be amongst all the others crying "injustice" and "foul" if it didn't pay compensation. Impossible to win with ThaiVisa posters.

Edited February 27, 2015 by Sviss Geez

[Sviss Geez]

Any loss like that a bank takes has to come out of its own capital, i.e. stock sales and retained earnings. It can't use its deposit accounts because that's customer money.

I haven't looked to see how much liquid capital (capital not counting buildings, equipment, etc.) that SCB has but this is a real hit.

I wonder if there is an acceptable capital to deposit ratio that meets international standards in Thailand?

"Any loss like that a bank takes has to come out of its own capital..."

Or insurance.

"I haven't looked to see how much liquid capital (capital not counting buildings, equipment, etc.) that SCB has but this is a real hit."

SCB will probably survive quite comfortably without your checking it's liquidity.

[siampolee]

''The Bank''

Anyone actually asked where the money is coming from?

It's the depositors money,

Banks are no more than money renters (pimps) they rent our money and pay us a small fee for that privilege (interest) .

They then rent (pimp) our money they have borrowed from us out at a higher rental fee( interest or in some cases usury.) with a high level of security in the form of property of varied sorts or guarantors.

Ideal situation isn't it.

The depositor in truth has no safeguards.

O.P.M.Other peoples money.

The great lifeboat that the banks have is they limit their liability so if they lose the little depositors lose a lot more and as we all well know in steps the government (taxpayer) who foots the bill.

[Pib]

Guess even SCB feels their staff involvement in the embezzlement was pretty blatant and to fight it in court would just end in the same result (i.e., SCB staff found to be deeply involved) along with years of bad press for SCB which would hurt business much more than taking this short term hit. Take one big beating now so the publc can then start forgetting about the incident versus taking a bunch of little and constant beatings for years.

[TallGuyJohninBKK]

...SCB agreed to compensate the loss of 1.5 billion baht when it was also found that the bank staff was also found to have connection in the embezzlement scam.

That's the sentence that everyone reading here ought to be focusing on...

[wabothai]

And do they have that amount laying around somewhere?

[laocowboy2]

Any loss like that a bank takes has to come out of its own capital, i.e. stock sales and retained earnings. It can't use its deposit accounts because that's customer money.

I haven't looked to see how much liquid capital (capital not counting buildings, equipment, etc.) that SCB has but this is a real hit.

I wonder if there is an acceptable capital to deposit ratio that meets international standards in Thailand?

As of FYE December 2014, SCB had shareholders funds of THB286.3 billion. Free capital (which excludes fixed assets etc.) comprised 87.96%. THB1.5 billion is therefore just 0.6% of free capital.

Capital to deposits is not a ratio that is commonly used to measure either capital adequacy or liquidity. In terms of capital adequacy, the CAR to Basel 11 (the international standard now) was 17.0% on a consolidated basis (16.9% on a bank-only basis. Tier 1 only ratio was 13.6% on a consolidated basis. Total capital to total assets was a high 10.6%. In terms of liquidity, net loans were equivalent to a conservative 76.16% of stable funds while the net liquid asset ratio was 23.75% - a high ratio by international standards.

Bottom line - still rock solid financials. Reputational damage however possibly major, especially in Thai terms as SCB (given its origin and Crown Property Bureau partial ownership) was always seen as being in some the Royal Family's bank and one where ethical and moral standards were possibly higher than elsewhere in the sector.

[kotsak]

Kind of unusual move since most of the times when banking staff were involved in illegal activities resulting to money loss for the customers, the banks would simply shrug it off and ask the customers to sod off, totally ignoring the fact that the staff were under their watch when the crimes took place.

Apparently this time the amount is so huge that soding off is not an option anymore

[WitawatWatawit]

SCB covering its ass....lmao

What's so funny about the bank doing the right thing and compensating the Institute? SCB is co-operating with KMIT and the investigators to prosecute all those found to have committed offences. That's not "covering it's arse".

You'd be amongst all the others crying "injustice" and "foul" if it didn't pay compensation. Impossible to win with ThaiVisa posters.

Yes, it's funny. Hilarious. Considering how much SCB prevaricated, stalled and generally dicked everyone around during the initial investigation. Now it has to eat humble pie. LMAO. They're cooperating because they have clearly found themselves in an untenable situation. Once again, LMAO

[Old Man River]

Any loss like that a bank takes has to come out of its own capital, i.e. stock sales and retained earnings. It can't use its deposit accounts because that's customer money.

I haven't looked to see how much liquid capital (capital not counting buildings, equipment, etc.) that SCB has but this is a real hit.

I wonder if there is an acceptable capital to deposit ratio that meets international standards in Thailand?

As of FYE December 2014, SCB had shareholders funds of THB286.3 billion. Free capital (which excludes fixed assets etc.) comprised 87.96%. THB1.5 billion is therefore just 0.6% of free capital.

Capital to deposits is not a ratio that is commonly used to measure either capital adequacy or liquidity. In terms of capital adequacy, the CAR to Basel 11 (the international standard now) was 17.0% on a consolidated basis (16.9% on a bank-only basis. Tier 1 only ratio was 13.6% on a consolidated basis. Total capital to total assets was a high 10.6%. In terms of liquidity, net loans were equivalent to a conservative 76.16% of stable funds while the net liquid asset ratio was 23.75% - a high ratio by international standards.

Bottom line - still rock solid financials. Reputational damage however possibly major, especially in Thai terms as SCB (given its origin and Crown Property Bureau partial ownership) was always seen as being in some the Royal Family's bank and one where ethical and moral standards were possibly higher than elsewhere in the sector.

SCB is an excellent bank and is well managed. Fraud happens all over the world. In this one there are other things potentially involved and it is clearly a situation where the bank is doing the right thing.

[NeilSA1]

SCB covering its ass....lmao

What's so funny about the bank doing the right thing and compensating the Institute? SCB is co-operating with KMIT and the investigators to prosecute all those found to have committed offences. That's not "covering it's arse".

You'd be amongst all the others crying "injustice" and "foul" if it didn't pay compensation. Impossible to win with ThaiVisa posters.

SCB took a very long time to co-operate. It sounded very suspicious (TV 14.2.2015)

".... said (alledged) a number of cheques and transactions were signed retroactively by KMITL lecturers authorised to do so...."

".....KMITL had requested the delivery of 68 documents associated with eight bank accounts so far. Eight documents had been received...."

I am pleased that the bank has compensated the Institute, but I also wonder if this stemed from an altruistic motive or just a plain old 'covering it's arse'

[Lite Beer]

SCB to pay KMITL Bt1.5 billion
Chuleeporn Aramnet,
Noppadol Srithaveegard
The Nation

BANGKOK: -- Banker has accepted responsibility for the institute's embezzled cash

SIAM COMMERCIAL BANK yesterday agreed to a Bt1.5 billion 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.

Source: http://www.nationmultimedia.com/national/SCB-to-pay-KMITL-Bt1-5-billion-30255056.html

-- The Nation 2015-02-28

[NeverSure]

"Any loss like that a bank takes has to come out of its own capital..."

Or insurance.

"I haven't looked to see how much liquid capital (capital not counting buildings, equipment, etc.) that SCB has but this is a real hit."

SCB will probably survive quite comfortably without your checking it's liquidity.

Last I knew E and O insurance didn't cover employee crimes.

That's very nice that they can survive just fine. Are Thai banks still holding crap condo buildings as full assets that they foreclosed in 1997, or did they write those off? Last reports I've read, they were still holding them as assets to cover the bad loans even though they were empty and falling apart. Creative accounting there.

How about the loans for the rice scheme? Has the Ag Bank written the value down, or are they still pretending they have enough rice as collateral to cover them?

I'm just asking because as an old bank auditor, I see a lot of fraud somewhere.

[NeverSure]

SCB covering its ass....lmao

What's so funny about the bank doing the right thing and compensating the Institute? SCB is co-operating with KMIT and the investigators to prosecute all those found to have committed offences. That's not "covering it's arse".

You'd be amongst all the others crying "injustice" and "foul" if it didn't pay compensation. Impossible to win with ThaiVisa posters.

I think the question really is, "Why is the bank paying out so fast, and why does it appear that they may be trying to remove the

spotlight from it"?

[TallGuyJohninBKK]

SIAM COMMERCIAL BANK yesterday agreed to a Bt1.5 billion insurance payout to cover the money embezzled from King Mongkut's Institute of Technology LatKrabang (KMITL) via the financial giant's accounts.

I too was wondering about the source of the funds for the payout here. If you rely on the OP article quoted above, it would appear to suggest insurance.... based on the wording. Though there's no detail of that reference provided in the rest of the article.

Just as an aside, if I recall correctly, the major VIP shareholder in the bank also owns a prominent insurance company in Thailand, the same one that insured CentralWorld when it was burned. Wonder if they might also be an insurer for SCB?

I'm guessing, this would be the largest single Thai bank fraud reimbursement ever???

Edited February 27, 2015 by TallGuyJohninBKK

[NongKhaiKid]

SCB covering its ass....lmao

What's so funny about the bank doing the right thing and compensating the Institute? SCB is co-operating with KMIT and the investigators to prosecute all those found to have committed offences. That's not "covering it's arse".

You'd be amongst all the others crying "injustice" and "foul" if it didn't pay compensation. Impossible to win with ThaiVisa posters.

I think the question really is, "Why is the bank paying out so fast, and why does it appear that they may be trying to remove the

spotlight from it"?

Exactly. Cases involving compensation etc can drag on for decades here yet after an initial reluctance to co-operate by handing over documents the bank is paying up at the double !

Nothing is ever quite what it seems.

[Stradavarius37]

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SCB covering its ass....lmao

What's so funny about the bank doing the right thing and compensating the Institute? SCB is co-operating with KMIT and the investigators to prosecute all those found to have committed offences. That's not "covering it's arse".

You'd be amongst all the others crying "injustice" and "foul" if it didn't pay compensation. Impossible to win with ThaiVisa posters.

Thanks for that post Spanky. But the fact is that banks don't refund 1.5 billion baht unless they are culpable for the loss. If it was KMUT's fault entirely, they wouldn't refund anything. Couple that with their delay in being forthcoming with critical documents and their mysterious "fire" caused by "Mosquito spray" and you have a tacit admission of at least partial culpability in the embezzlement.

Its not doing the right thing - it is covering its ass. Can't see that? You are both naive and unaware of how banking and business work.

Edited February 28, 2015 by Stradavarius37