SCB chairman Chirayu Isarangkun na Ayutthaya said on Friday that the bank had not altered its loan to King Power for running the duty-free shops as the concession contract with AOT had not been officially abolished. Nor has King Power been officially informed of the contracts' abolishment.

However, he said SCB was closely monitoring how the concession contract case was concluded.

AOT's board said King Power had deliberately brought down the value of several projects to below Bt1 billion to avoid coming under the Public-Private Joint Venture Act. Under the law, the contracts would have been subject to a more extensive review.

"The bank is not concerned about the issue, and we believe that with our risk-management system we shall not be affected by it. However, there is not only one answer. We are prepared for several conclusions. The bank will fully extend cooperation to all parties for the examination of the issue," Chirayu said.

The bank adjusted its loan-approval process after some of its loans came under social pressure. It had approved loans for GMM Media to take over the Matichon group, but the hostile takeover deal failed due to public protest.

Chirayu insisted SCB's loan approvals were now partly based on considerations of social feedback. Some lending projects, such those involving concessions and socially sensitive issues, need approval by its risk-management panel and board.

Corporate division executive vice president Sarunthorn Chutima said King Power's concession-contract problem was unlikely to affect the bank's business. The customer, Sarunthorn said, still has high potential for debt payment due to its strong financial status.

Meanwhile, SCB is monitoring TITV's debt-payment ability. TITV, earlier named iTV, is another SCB borrower faced with a concession-contract problem, and its financial status is weak.

The TV operator has defaulted on concession-fee payments to the government. TITV has to pay Bt1 billion a year to the Prime Minister's Office, which granted the concession, or at least Bt20 billion over the next 20 years of the concession term.

Sarunthorn said, however, that TITV could pay loan interest to the bank and thus was still classified as having a performing loan. When it cannot service the debt, the bank will have to put it into a debt-restructuring process, he said.

Somruedi Banchongduang

The Nation