The Ratchada-Phisek land which Pojaman Shinawatra purchased at auction in December 2003 was part of a series of assets bought by the FIDF from Erawan Trust.Erawan Trust had acquired the deeds to the land when a former borrower defaulted on a 103 million baht loan and the land was then seized by the finance company.
According to Shale Asher Horowitz in his book, "The political economy of international financial crisis: interest groups" the company had been founded by former Prime Minister, Major General Chatichai Choonhavan, who was also the largest shareholder. The company eventually went bankrupt and a few days after Chatichai's death the company was formally taken over by the Bank of Thailand and became one of the founding blocks of what today is known as Bank Thai, with The FIDF then being a major shareholder (42.13 %). In 2008, they sold their stake to the Malaysian bank CIMB for 5.9 Billion baht.
Like Thaksin Shinawatra, Chatichai Choonhavan was ousted in a bloodless coup d’etat; the reason given for the coup was the alleged rampant corruption, although unlike Thaksin Shinawatra, neither Chatichai nor any of his fellow Ministers were ever brought to court over these allegations.
Erawan Trust was established on 4th October 1974, whilst Chatichai was Deputy Minister of Foreign Affairs in the Government of Prime Minister Sanya Dharmasakti.
It first came to international attention when it was named as one of the financial institutions which helped create the financial crisis in Thailand in 1983, because it was not in a position to repay maturing promissory notes, this was amidst allegations that many of the loans made by the company were to the executives of the financial institution.
It became known in Asia when the Far Eastern Economic Review (FEER) did a 2 page article on Chatichai and Erawan trust whilst Chatichai was Prime Minister in September 1988 (The publication was banned in Thailand).
Erawan Trust was named as one of the top 7,500 largest companies in Asia By Asia Pacific Marketing Services(1990)
According to official records from the Bank of Thailand the only troubled financial institute which was allowed to sell assets in return for the FIDF providing sufficient liquidity was Erawan Trust, and they went through this process on 4 separate occasions.
31st July 1995 - US$ 45,000,000 (Prime Minister Banharn Sipha-Archa)
30th November 1996 - US$ 170,000,000 (Prime Minister Banharn Silpa-Archa)
14th November 1997 - US$ 169,000,000 (Prime Minister Chuan leekpai)
19th February 1998 - US$ 169,000,000 (Prime Minister Chuan Leekpai)
Original source: Bank of Thailand.
Quoted in, "EADN Regional Project on the Social Impact of the Asian Financial Crisis" by Adis Israngkura (2002)
The first selling of assets to the FIDF which occurred less than two weeks after Banharn Silpa-Archa formed his cabinet. It was this purchase which gave the FIDF the land close to Ratchada Phisek Road which was eventually auctioned off to Pojaman. The Finance Minister at the time was Surakiart Sathirathai, who was the former Policy Advisor for trade negotiations to Chatichai Choonhavan. In addition, Thaksin Shinawatra was also the Deputy Prime Minister. At the time, all actions by the FIDF had to have approval from the cabinet.
The second selling of assets to the FIDF actually occurred whilst the government was dissolved and a few days prior to Chavalit taking office.
The third selling of assets to the FIDF actually occurred on the day Chuan took office
The final selling of assets to the FIDF occurred 3 months prior to Chatichai dying of lung cancer, and included a write-down of the companies assets, and a total change in the executive board.
The deal to finally liquidate the company and use it's assets as the basis of Bank Thai was made public on the 18th May 1998, 6 days after Chatichai's death. By this time US$ 553 million had been spent on assets of Erawan Trust by the FIDF.
The FIDF spent a total of 1.4 Trillion baht in supporting and purchasing of assets from financial institutions as a direct result of the Asian Crisis in 1995 - 1998.
In October 2010, the Ministry of Finance revealed that the outstanding debt of the FIDF was still 1.1 Trillion baht, with yearly interest payments totaling 65 Billion baht. It's total assets were just 200 Billion baht.
