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Thailand To Investigate Ex-Premier

May 6, 1998

BANGKOK, Thailand (AP) _ The government ordered an investigation of the former prime minister and finance minister in connection with the financial turmoil that led to last summer’s currency devaluation.

The Cabinet on Wednesday reviewed a 205-page report on the foreign exchange fiasco that forced a devaluation of the baht and called for a committee to investigate the politicians and central bankers deemed responsible.

Those named in the report included the prime minister and finance minister at the time, Chavalit Yongchaiyudh and Amnuay Viravan, respectively. The central bank governor, Chaiyawat Wibulswasdi, who resigned Monday, also was cited.

The investigation would mark the first serious attempt to hold accountable public officials whose failed defense of the baht against currency speculators drained billions of dollars in reserves.

Thailand was forced to let the market set a rate for the baht in July, triggering a chain reaction across Asia that ended the region’s economic boom. The International Monetary Fund has since fashioned some $120 million in bailouts for Thailand, South Korea and Indonesia.

The investigating committee will be led by Deputy Finance Minister Pichase Panvichatikul and will seek evidence of malfeasance on the part of those who presided over the deterioration of the reserves.

``Whether those people are politicians or civil servants, they will be included in the investigation″ and, if evidence warrants, prosecuted, Pichet said.

Finance Minister Tarrin Nimmanahaeminda told reporters the investigative panel would be separate from a committee that is studying ways to restructure the bank. The committee, which includes foreign central bankers, is expected to take four months to conduct research and make recommendations.

The Cabinet also approved the appointment of a new central bank governor, Chatu Mongkol Sonakul, who quit as Finance Ministry permanent secretary in a dispute with Chavalit’s government last year. His appointment must still be approved by King Bhumibol Adulyadej.

Chatu Mongkol, 54, has gained many enemies during a long career in which he became known for shooting down financial policy proposals from corrupt politicians.

That reputation is expected to serve him well in his new job. The government of Prime Minister Chuan Leekpai needs to raise the Bank of Thailand’s credibility to restore investor confidence and help lift the economy out of recession.

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