KTB keeps close eye on rice-exporting client

The bank will control the company's payments and also hire a Singaporean surveyor to inspect its rice stockpile, to prevent corruption. The loan was also approved on the condition that the company's shareholding was completely restructured.

KTB says it feels the need to keep a close watch on the customer to ensure smooth operations and regular debt repayments.

Siam Indiga is a subsidiary of President Agri Trading, once the country's biggest rice exporter. The parent company is alleged to have defaulted on loans from many banks, amounting to billions of baht. Among President Agri Trading's loans was Bt900 million from KTB. It is now a non-performing loan. The company also breached rice-bidding contracts with the Commerce Ministry involving about 1 million tonnes of

rice.

Siam Indiga was set up as a separate operation by borrowing Bt1 billion from KTB as an investment loan. The money was spent for building a warehouse for improving rice quality, a silo and a pier in 2003.

KTB at first denied further lending when the company proposed to borrow an additional Bt2 billion to Bt3 billion in working capital.

The denial prompted the company to restructure its shareholding to gain loan approval.

KTB president Apisak Tantivorawong said the bank would manage every movement of cash flow for the company and had hired a Singaporean specialist in stock checking to watch the company closely.