Thai Agency Seeks Valuation Rules for Asset Transfers from Local Banks.

Byline: Wichit Sirithaveeporn

Aug. 2--Executive directors of the Thai Asset Management Corp have agreed to push for amendments to the agency's legal framework to use valuation methods of the Bank of Thailand for handling asset transfers from local banks.

Thanong Bidaya, TAMC executive chairman, said yesterday that an amendment would be made by Aug 15 to enable the state agency to begin operations as quickly as possible.

Policymakers hope to transfer 300 priority cases worth 400 billion baht to the TAMC by the end of the month. Ultimately, up to 1.3 trillion baht in assets from private and state banks will go to the state-owned TAMC.

Under the existing executive decree, assets are valued based on net book value or Land Department valuations, whichever is lower.

The rule has raised protests from local banks, which fear that assets would thus be undervalued during the transfer process, thus raising their immediate losses and putting pressure on capital funds. The existing rule would also have forced banks to revalue their assets, a time-consuming and costly process given the more than 160,000 cases expected to ultimately go to the TAMC.