Siam Commercial Bank (SCB) is giving more time to King Power International before making any decision on a loan it made to the duty-free operator.

Airports of Thailand (AOT) has cancelled its contracts with King Power for its exclusive duty-free shop and management of the commercial area at Suvarnabhumi Airport.

SCB executive vice president Sarunthorn Chutima said yesterday that, as a creditor, the bank could negotiate with King Power on its new business plan if the company's prospects were changed by the end of its monopoly at the new airport.

However, he said King Power so far remained financially healthy and posed no problems in servicing debts.

Vichai Raksriaksorn, chairman and chief executive officer of King Power, was not available for comment about the issue. He is reportedly on an overseas business trip.

On Thursday AOT's board of directors resolved to open new bidding to find several duty-free operators. It also wants to have all retail tenants at the terminal sign new leases with AOT individually.

Chirmsak Pinthong, an AOT director and the board's spokesman, admitted it had not yet delivered official notice to King Power of the nullification of its contracts, but he said the Office of the Attorney-General would take action soon.

Confirmation of the decision caused jitters among retail operators at Suvarnabhumi.

SCB is concerned that it may have to give up some foreign-exchange booths at the airport to other banks if tenants have to sign new leases.

Prawet Sutthirat, SCB's executive vice president, said yesterday that the bank's branches at Suvarnabhumi would not be affected as they did not generate much income. One branch has been changed to a controlling office due to low business volume.

However, he noted that if AOT demanded that SCB give away some of its foreign-exchange booths to other banks, that could hurt its income.

Unlike Don Muang Airport, where nearly all banks operated forex booths, only two banks won concessions to operate the service at Suvarnabhumi, SCB and TMB Bank. Each has 17 booths.

Amid the uncertainty, some tenants of the commercial area have urged King Power to clarify the situation of the nullified contracts.

The operators also threatened not to pay rent to King Power if they could not get a clearer explanation.

An officer of the Association of Thai Travel Agents (ATTA), which is among the tenants, said it had been paying its rent to King Power.

"We have no further comment on the contracts, but we are worried about the problem," the source said.

A member of staff at a counter of the Tourism Authority of Thailand (TAT) said TAT had a contract directly with AOT and therefore the nullification of contracts with King Power would pose no problem.

However, TAT and ATTA want both AOT and King Power to clarify the matter.

Despite the Council of State's ruling that King Power violated regulations when signing the contracts, King Power insists it has broken no rule.

Somruedi Banchongduang,

Suchat Sritama

The Nation