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November 30, 2000

From Our Correspondent: Hirohito and the War
A conversation with biographer Herbert Bix

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Bad news for the Philippines - and some others

From Our Correspondent: Making Enemies
Indonesia needs friends. So why is it picking fights?

Asiaweek Time Asia Now Asiaweek story

OCTOBER 8, 1999 VOL. 25 NO. 40

He Knew Too Much
Who's afraid of Mr. Condom?

"The Thai public have a thirst for information," says Mechai
Yvan Cohen for Asiaweek
Mechai Viravaidya saw it coming. He put in his resignation hours before he was ousted Aug. 24 as chairman of Thailand's second-largest lender, state-controlled Krung Thai Bank. In his 11 months at the bank, Mechai, 58, won praise for bringing in a respected board of directors, putting in place a solid restructuring plan and hiring an external auditor to probe Krung Thai's non-performing loans. The man once known as "Mr. Condom" for championing safe sex in Thailand spoke with Asiaweek's Julian Gearing.

Your decision to hire an outside audit firm did not seem to sit well with some people.
When one is asking the public to put in 250 billion baht [to recapitalize Krung Thai], surely one needs to examine how it is to be used and how well it is to be used. There is no witchhunt, there is no political motive in this. All parties agreed that this should be done.

Controversy and More
What Pricewaterhouse- Coopers really found at Thailand's Krung Thai bank

Did you leak the results of the audit?
No, no. I would say about 15 other people would have had [a copy of the report]. And who else may have seen it apart from the 15? But it seems the government believed I was the one who did it.

How will the Krung Thai case affect bank reforms?
It is very damaging. I guess what has made the government somewhat irritable, and at the same time what blew up some issues out of proportion, is the opposition trying to attack the government, and to link [former Krung Thai chief Sirin Nimmanhaeminda and his brother, Finance Minister Tarrin Nimmanhaeminda]. The minister of finance says Mechai is trying to destroy the Democrats. I am not. I think the government believes it has contained the damage completely. I think it believes that if the PricewaterhouseCoopers' audit continues, it will come out as rather a dud, a rubber bullet. But this can also mean the auditors will pull out because they do not want their reputation tarnished.

How do you see Krung Thai's future?
I went in, we say in Thai, not to bruise the lotus or muddy the water. Krung Thai has great potential. If you can find a good strategic partner, it can be better. Put in new systems and international banking practices. Sirin had started this already, I acknowledge that. We have to continue and expand to make sure a new system, a credit process, is put in.

What I think shocked a lot of people was the appointment of senior executive vice-presidents under the board of directors. I opposed that. I told Tarrin, "You have the president, that is enough." I also opposed making the CEO chairman of the executive committee. And I oppose putting the audit department under the CEO, which is what is being planned. Accountability and transparency would be lost. The Thai public wants to know about [the Krung Thai report]. They have a thirst for information. This is the first time any information on the banking system has come out.

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