Siam City Bank (SCIB) yesterday scrapped the outcome of a selection process for its new president, dissolved the three-member selection committee and declared that its board of directors will choose a new president by the end of next month.

The Bank of Thailand (BOT) agreed with the decision by the bank's board of directors.

SCIB chairman Sompol Kiatphaibool said cancellation of the new president-selection process, in which Chulakorn Singhakowin gained the highest score, was done to prevent rifts and conflicts within the bank.

The board rather than a selection committee will choose the new president, he said. The nine-member board will select qualified candidates and choose the one most suitable to be SCIB's new president. This will be done by the end of next month.

"The situation in our country is just like this [full of uncertainty]," said Sompol. "We don't want to create any rifts or conflicts."

SCIB earlier called for applications to fill the post of president from both outside and inside the bank. After a preliminary selection process, it finally had two dominant candidates: Chulakorn Singhakowin, former president of the now-defunct Bank of Asia; and Lersuk Chuladesa, SCIB's first senior executive vice president.

Chulakorn earned the highest score from the selection committee, the three members of which were Khemchai Chutiwong; Tasana Ratchatabhoti, representing the bank's major shareholder, the Bank of Thailand's Financial Institutions Development Fund (FIDF); and Sathit Limpongpan, representing the Finance Ministry. However, the bank's board of directors proposed Lersuk as new president to its major shareholder, the FIDF, saying the bank's labour union was severely opposed to an outsider.

The union also petitioned the central bank to ask for the appointment of an insider, saying there was some concern that if Chulakorn were appointed, he would implement harsh measures, including staff lay-offs.

Chulakorn reportedly was supported by Finance Minister and former BOT Governor MR Pridiyathorn Devakula to step into SCIB and merge it with BankThai.

Despite the board's proposal and the union's appeal, the FIDF insisted the bank select Chulakorn to be the new president, because he gained the highest score in the selection process.

This led to yesterday's decision by the SCIB board to cancel the selection process. It said it had considered the impact on stakeholders, including shareholders and staff.

"If the board of directors implements its earlier intention [to appoint Lersuk] or follows the major shareholder's opinion [to appoint Chulakorn], either way the situation will spill over. This could negatively affect the image of the bank as well as that of the country," the bank said in a statement.

Sompol said the new president-selection method would take less time than the previous process and finish by the end of next month. There will be no announcement of candidates seeking the position.

All private companies adopt similar methods, by using "head-hunters" to provide candidates, he said. The bank's board of directors will do its duty, and the criteria for selection of a new president will be no different from those in the previous process.

Sompol said the bank was not obliged to ask the FIDF for permission to cancel the selection process. However, once a new president is chosen, the bank will need to ask the FIDF for its approval.

Sompol said this method would make the selection of a new president "settled and acceptable" for both the FIDF and the labour union.

"We believe the FIDF will understand us."

BOT governor Tarisa Watanagase supported the bank's decision yesterday. "To opt for another round is good. It's okay to do it again," she said.

However, she said the selection-committee process conformed to principles of good governance. All banks should have selection committees, although it is not mandatory.

The FIDF will wait to see whether the bank uses an acceptable method with transparency in selecting the new president.

"The bank is listed," she said. "It should be transparent and able to explain its actions."

Anoma Srisukkasem,

Somruedi Banchongduang

The Nation