Chiang Mai (Mizzima) - Former Thai Foreign Minister insisted in the Thai Supreme Court on Tuesday that ousted Prime Minister Thaksin Shinawatra told the cabinet to be lenient towards the Burmese government over a large soft loan in 2004.
Surakiart Sathirathai, Foreign Minister in Thaksin’s government, who was a witness in the case of the contentious soft loan from Thailand to Burma, told the Supreme Court in Bangkok that former PM Thaksin Shinawatra told the cabinet to take a soft stand towards the Burmese junta when it asked for a reduction of interest rate on the loan for improving telecommunication in Burma.
He told the court that Thaksin, who currently is a fugitive abroad, did not disagree when he warned Thaksin not to agree on the additional loan to Burma for buying telecom services from Shinawatra Satellite, according to a report in the Nation on Wednesday.
He testified as witness to the Supreme Court's Criminal Division for Holders of Political Office in the Bt 76 billion assets seizure case against the former Thai premier. He told the court that the Thai cabinet initially approved Bt 3 billion (91 million US$) to Burma for trade, agriculture, industry and tourism development through Thailand’s Export and Import Bank (Exim Bank). But the Burmese government later asked for more for telecom development. He had advised Thaksin not to approve it fearing conflict of interest.
In 2004, the Exim Bank granted a 12-year credit line for the Burmese government's construction and telecommunication projects, which used Thai suppliers and contractors.
This would be in breach of the Bagan Declaration that barred Thailand from lending for telecom development to prevent conflicts of interest on the part of Thaksin, whose family owned the country's largest telecom business at that time.
The declaration only allows lending for purposes such as trade, investment, agriculture, industry and regional transportation links.
Shinawatra Satellite in 2004 leased a satellite service for broadband internet access and telephone service to Bagan Cybertech Ltd, a Burmese company owned by the son of the former Burmese Prime Minister, Gen Khin Nyunt.
However, the Burmese government later sought Bt 2 billion (60 million US$) additional loan, but the government negotiated for a reduction to Bt 1 billion (30 million US$), raising the overall loan amount to Burma to Bt 4 billion (120 million US$).
Surakiart said the Burmese government later asked for a reduction of interest rate from 5 per cent to 3 per cent on the ground that the Laotian and Cambodian governments got soft loans from Thailand at the rate of 2 per cent per annum.
Surakiart said when he informed Thaksin about the Burmese government's request of rate reduction; Thaksin replied that the consideration had to be as lenient as possible.
The case is one of several alleged corruption investigations against Thaksin and his cabinet ordered by the military-dominated Council for National Security, which staged a coup in 2006.
In October 2006, Exim Bank released a statement saying the Burmese government had made all four installment payments and interest payments on the loan.
In November 2006, Burmese Prime Minister Soe Win asked Thai interim Prime Minister Surayud Chulanont to extend the loan's repayment period by one year, saying Burma might have difficulty meeting the deadline.
In early August, 2007, The Assets Examination Committee of Thailand accused Thaksin of ordering an increase in a loan to Burma that benefited his family's telecommunication business.
After that, in late August 2007, Former Thai Prime Minister Thaksin Shinawatra sued government anti-corruption officials, claiming they falsely accused him of illegally increasing the amount of a state loan to Burma for personal gain.
In March 2009, Kasit Piromya, Thailand’s Minister of Foreign Affairs, said after his visit to Burma that a controversial four billion baht loan from the Thailand Export and Import Bank to the Burmese government during the tenure of former Prime Minister Thaksin Shinwatra has been repaid through the Thai Embassy in Burma. “The corruption on this case is [the only remaining issue and] Thailand’s problem,” he said.
The court asked for more documentary evidence and witnesses for two more hearings, scheduled on January 12 and January 14, 2010.