A Perspective on the Klongchan Credit Union Cooperative Case

By Patrick Chan

What Transpired and How It Can Be Rectified

Klongchan Credit Union Cooperative (KCUC) initially had a working capital of 21,000 M baht. The issue arose when it permitted 12,000 M baht in loans, making itself illiquid—a state of lacking sufficient funds to meet its obligations. This led to a deficit preventing the cooperative from having available funds for circulation, putting it at risk for bankruptcy. Potential approaches to rectify the situation and restore the cooperative are as follows: 

1. Negotiation with its creditors for leniency/grace period

2. Secure additional investment sources 

3. Collect debt payments

4. Increase its membership

The cooperative shouldn’t have permitted DSI to file money laundering charges. Doing so essentially suspends the cooperative’s financial operations and increases its likelihood of bankruptcy, as few financial institutions would risk lending to the cooperative, further exacerbating its situation.  

Supporters of Wat Phra Dhammakaya understood the gravity of the situation and raised over 600 M baht in funds to revitalize the cooperative and prevent the 53,000 members from going bankrupt. They recognized the current economic state would lead to difficulties in securing loans from other banking institutions. Moreover, as the cooperative weakens, competitors see it as a good sign that a sizable community bank will be eliminated from the market. The problem worsened when DSI in turn accuses the Abbot of Wat Phra Dhammakaya of money laundering, further troubling temple supporters who had generously raised funds in an act of goodwill. 

1. These supporters feel betrayed by the cooperative.

2. They feel DSI is specifically targeting Wat Phra Dhammakaya.

3. In addition, the cooperative’s members are being misled into believing the 12,000 M baht can be demanded from the temple.

The truth is 857 cheques worth 12,000 M baht were paid to seven groups. Five were cooperative debtors. Two others – Wat Phra Dhammakaya and various other temples – became victims when the donations received via cheque were drawn from borrowed cooperative funds.

What is most perplexing is DSI has not filed charges against any other group, but it has singled out the Abbot of Wat Phra Dhammakaya for money laundering charges. As stated earlier, the Abbot’s supporters have already raised funds to aid the cooperative’s members during this trying time.  

Please consider the following:

1. The cooperative lost 12,000 M baht through 857 cheques paid out to various groups, yet all money laundering accusations are directed only at the Abbot of Wat Phra Dhammakaya. Is this a fair way of exercising the law? 

2. Will DSI’s accusation of the Abbot of Wat Phra Dhammakaya for money laundering help restore the cooperative and recover 12,000 M baht from its debtors?

3. When accusations of money laundering occur down the line, one ultimately has to start at the front of the line – the cooperative by implication. Will financial institutions step in to assist the cooperative if it is accused of money laundering as well?

  4. If the cooperative went bankrupt as a result of money laundering accusations, will the DSI take responsibility for the bankruptcy of its members?

5. Among the 53,000 members are several thousand who are temple supporters. Some are deceased yet funds still cannot be withdrawn for those accounts; others have deposited millions yet withdrawals are on hold for those. Will the DSI take responsibility for these hardships? Will it secure funds to assist members who are also temple supporters? 

6. If the cooperative goes bankrupt, will DSI assume responsibility for returning 600 M baht in funds raised by temple supporters for the cooperative?

 7. If donations made to a Buddhist temple place the abbot at risk for money laundering charges and accepting stolen property, would any monk risk assuming the roles and responsibilities of a temple abbot? 

If this manipulation of the law leads to the abandonment of the 35,000 temples throughout Thailand, will DSI be accountable for Buddhism’s decline? When exercising the law, one must go beyond the scope of the law and examine potential repercussions. DSI’s actions will set a precedent for law administration regarding charges of money laundering and receipt of stolen property to be potentially applied against all Buddhist temples, as well as for methods used for revitalization of financial institutions in Thailand.