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. Last Updated: 07/27/2016

Thai Central Banker Vows to Clear Name

BANGKOK, Thailand -- The Thai central bank chief ordered to reimburse the government for the $4.6 billion he spent defending its currency before the 1997 crash will fight the court verdict and to clear his name, his lawyer said.

"We will fight until we receive justice," Noppadon Laowthong said in a telephone interview on Wednesday.

"From all the evidence that I have, I believe we will receive justice in higher courts."

Rerngchai Marakanond, head of the Bank of Thailand when it fought a losing battle against speculators and had to devalue the baht in 1997, triggering the Asian economic crisis, could lose everything he owns.

The Bangkok Civil Court told him on Tuesday that his assets would be seized if he did not pay the central bank the $4.6 billion within a month. His lawyer declined to say how much Rerngchai, who is retired and living in Bangkok, was worth.

The court ruling, which effectively pinned the blame for starting Asia's 1997-98 crisis on one man, found Rerngchai guilty of "gross negligence by using the country's foreign reserves until they went into deficit."

Noppodon said the battle was as much about restoring Rerngchai's reputation as about the money.

Rerngchai always consulted his colleagues at the bank and the Finance Ministry while managing the baht and acted with caution, the lawyer said.

"He made careful considerations, reasonable decisions and acted with caution, with consultations on all fronts while the economy was so weak and fragile," Noppadon said.

Rerngchai headed the central bank when an overheated property sector collapsed and banks were failing in late 1996, setting the scene for the Thai crisis and the July 1997 baht devaluation that eroded most of the nation's foreign reserves.

The court said that Rerngchai did not respond to calls from the public and colleagues to loosen the baht's trading band against the dollar, arguing that foreign debts would soar if the baht were devalued.

It was devalued and foreign debts did soar, forcing many firms into bankruptcy.

Rerngchai, who worked under the government of Prime Minister Chavalit Yongchaiyudh, quit a few weeks after the devaluation, five years before his mandatory retirement. The crisis forced Chavalit to resign.

Thaksin said Wednesday that the baht debacle derived from a policy-level mistake that could not be blamed on one person.

"Sometimes, something falls on only one person, but it doesn't mean that person has done it all," he told reporters.

"I don't think Rerngchai should be the sole person to be held responsible."