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Thai finance firms to face 'moment of truth'
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Copyright ) 1997 Nando.net
Copyright ) 1997 Agence France-Presse
BANGKOK (December 6, 1997 6:17 p.m. EST http://www.nando.net) - Thai
financial chiefs Saturday handed a final list of technically bankrupt
finance firms to be shut down to the finance minister ahead of the
country's "moment of truth" next week.
The head of the body charged with deciding the fate of the 58 suspended
firms, groaning under the weight of massive bad debts, gave his
recommendations to Finance Minister Tarrin Nimmanahaeminda ahead of the
crucial announcement scheduled for Monday.
The unveiling of the key restructuring plan is Thailand's "moment of
truth," a time of reckoning following the end of the heady boom years of
the 1980s and early 1990s and the start of the worst slump since World
War II, the Nation daily said.
"The Financial Restructuring Agency (FRA) chief has completed the
screening of rehabilitation plans from the firms and submitted the
results to the finance minister," national television reported.
Top officials of the finance ministry and the central bank were later
Saturday expected to "discuss the plan and the handling of the situation
on Monday after the results of the decision are announced," ITV said.
The announcement on Monday of the fate of the 58 finance firms is the
most crucial economic decision facing Bangkok since it resolved to
effectively devalue the Thai baht in July, analysts said.
FRA chief Twatchai Yongkittikul and Tarrin will unveil the restructuring
plan for the sector at a special news conference at 8:30 a.m. on Monday
in a move which will decide the economic future of the country.
Analysts and sources have warned that only three to five of the 58
companies will be allowed to continue operating after Monday, the rest
being unsalvageable.
Twatchai meanwhile warned that it would take the FRA "two to three
months" to complete the asset seizure of those among the 58 suspended
finance firms to be shut down after Monday.
He also told national televison that suspended firms which will be
allowed to restart business will also have to wait "60 to 90 days" to
aomply with their rehabilitation plan."
He said the firms which are to be closed down under the massive
restructuring "will "immediately have their assets seized under the law.
"The FRA has sought cooperation from the police but expects no problems
or resistance from former management or owners," he was quoted as
saying.
Riot police have been put on standby for Monday's announcement on the
finance firms to avoid any outbreak of trouble by disgruntled workers
from the sector, the interiror Minister Sanam Kachornprasart said.
More than 20,000 finance sector workers will Monday join the ranks of an
estimated 1.3 million jobless in Thailand, a number which the labour
ministry fears could swell to around 2.8 million during 1998.
Premier Chuan Leekpai said he "felt sympathy" for the workers who will
lose their jobs, but said the "finance ministry will have a plan to
support the unemployed and eventually new organisations will spring up."
After the shut downs, officials from the central bank rescue fund --
which lent more than $11 billion to finance firms in an abortive bailout
-- and creditors would be asked to help audit the closed companies'
books, Twatchai said.
The Nation ran a special edition on the fate of the finance sector on
Saturday, highlighting the country's fall from a booming Asian "Tiger"
economy to a debt-ridden and austerity-bound country.
Thailand's next drawdown of its crucial $17.2 billion International
Monetary Fund rescue plan depends on its decision over the restructuring
of the finance sector -- a key condition imposed by the IMF.
The burden of the estimated $35 billion in bad debts carried by the
shattered financial sector was one of the key factors which pushed
Thailand to go cap in hand to the IMF.
The economic credibility and longevity of the new government of Chuan
will also be decided by Monday's announcement.
By MARC LAVINE, Agence France-Presse
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