Controversial loan likely to become a hot potato

The OAG on Friday urged the Assets Examination Committee (AEC) to form a joint panel to vet the investigative report on the Bt4 billion Export-Import (Exim) Bank loan extended to Burma after Thaksin's intervention .

As a key witness in this case, Surakiart was asked by the OAG to assert that his testimony to the AEC was true.

The committee was put together by the Council of National Security, the group of top brass that ousted Thaksin in the September 2006 coup. The AEC was designed to go after Thaksin's money and other suspect activities.

Other than this case, the AEC doesn't have much to show for its efforts, thus, the Exim-Bank loan to the Burmese, which was allegedly carried out to benefit Thaksin's business empire, is of paramount importance to the coup leaders who forced him out on these very grounds.

In his testimony, according to various accounts and sources, Surakiart told the AEC that Thaksin was solely responsible for the loan to the Burmese junta and that he was against the idea on the grounds that it would be seen as a conflict of interest.

His critics said the veteran technocrat-turned-politician was just trying to save his own hide and needed to jump ship to ensure his relevancy in a new political setting. Afterwards, the man was seen wheeling and dealing behind the scenes, trying to broker political settlements between various parties.

He didn't get anywhere.

Incidentally, as tanks were rolling in the streets of Bangkok, Surakiart was the first to go on CNN to defend Thaksin and slammed the generals for the coup. Both were in New York for the annual UN General Assembly.

And when Thaksin left for London, Surakiart hopped on a different plane, returning to Bangkok to ask the CNS to keep him on as Thailand's candidate for the post as the next UN Secretary-General. He succeeded.

But now with Thaksin's proxies and supporters in power, Surakiart has come to the realisation that he has bet on the wrong horse. The question now is, will Surakiart stick his neck out at this juncture?

In what came across as another delay tactic - or at least until the AEC expires at the end of June - the OAG has told the assets committee that it would require a new statement from Surakiart just to be sure that what he had told the junta and the AEC was correct. After all, what Surakiart told the OAG was the opposite to the formal request he had put forward to the Thaksin cabinet.

Surakiart is likely to keep mum until the AEC expires with the hope that he can turn the page on this political juncture.

Since the pro-Thaksin People Power Party rose to power after winning the December 23 election, several charges against Thaksin have been dropped or stalled by the OAG. The Burma loan is one of the cases that is still in the pipeline.

A key document related to the case is dated May 17, 2004, claiming Surakiart as foreign minister asked the Thaksin cabinet to approve a government loan to Burma. It stated that the foreign ministry had informed Thaksin what happened regarding the process since Burma approached for the loan.

In its report to the Thaksin cabinet, the foreign ministry made several comments in the document. They include:

- Following the PM's order, the government agreed to give a Bt4 billion loan to Burma as asked by the Burmese government.

- The loan to Burma is significant to the Burmese government in terms of internal politics. The appeal for the loan came from Burmese Prime Minister General Khin Nyunt. Burmese Foreign Minister Win Aung saw the loan as a masterstroke by Khin Nyunt while the country was facing enormous pressure from the international community. The success [of receiving the loan] will strengthen the position of General Khin Nyunt with Burmese [military] leaders. It is also regarded as an important step in achieving national reconciliation and bringing democracy to Burma.

The document includes a background that the then Burmese foreign minister Win Aung wrote in a letter, dated October 13, 2003, to the Thai foreign ministry, asking for a Bt3 billion loan. But Rangoon was not happy with the interest rate. And so at a conference in Phuket from February 7 to 8, 2004, the Burmese foreign minister asked the Thai government to help negotiate with Exim-Bank.

Burma also asked for a US$24 million (Bt775 billion) loan to develop the country's telecommunication networks.

On March 2, 2004, the Thai government informed Burma that PM Thaksin has given the green light to a Bt4 billion loan. Surakiart informed Win Aung on March 3, 2004. But the interest rate was still too high for Burma to accept.

On April 25, Exim-Bank managing director Sathaporn Chinachit went to Rangoon on a three-day visit to iron out the fine points for the loan agreement.

 Shortly afterwards, the director-general of the Politics Department at the Burmese Foreign Ministry, Thuang Tun, came to Thailand to meet the foreign ministry's permanent secretary, in a bid to adjust the loan conditions related to the rule of origin.

Surakiart then had reported to Thaksin, who later told the foreign ministry to adjust the conditions in favour of the Burmese.

Surakiart advised the AEC, according to an official document, that he had opposed the loan for Burma.

He stated that Thaksin's family held a stake in telecom firm Shin Satellite, from which Burma will spend a large amount of money to buy equipment. It could become a hot debate [over a conflict of interest], he added.