Oct. 30 (Bloomberg) -- Rakesh Saxena, a former adviser to a Thai bank whose collapse signaled regulatory failures that led to the 1997 Asian financial crisis, is due to arrive in Bangkok tonight from Canada after losing a bid to avoid extradition.

Saxena, 57, will be put in police custody on arrival, Thailand’s Attorney-General’s office said in a statement today. Prosecutors will file charges against him before July 20, 2010, when the statute of limitations on his case expires, the statement said.

The Supreme Court of Canada yesterday denied Saxena’s request to hear an appeal against the extradition. The court gave no reason for its decision. Canadian officials handed him over to Thai prosecutors shortly afterward.

Saxena fled to Canada in May 1996 after the government seized Bangkok Bank of Commerce Plc to stop a run on deposits triggered by a central bank report that about 78 billion baht ($3.1 billion at the time) of the lender’s loans were delinquent. Many of the loans were extended to top executives, their families and friends and politicians, the report said.

The seizure forced the central bank’s governor to resign and heralded a region-wide financial crisis a year later, when the baht’s devaluation caused Asian currencies to tumble. Half of the loans at Thai banks went bad.

Bangkok Bank of Commerce “was one of the first cases that exposed problems with Thailand’s regulatory environment,” said Virapong Boonyobhas, director of the Business Crime and Money Laundering Data Bank at Chulalongkorn University in Bangkok.

Saxena Charged

Saxena is accused of conspiring to embezzle 1.66 billion baht, currently about $49.7 million, from the bank, according to a 2006 British Columbia Court of Appeal ruling upholding his extradition. Thai prosecutors have already indicted him for approving the loan, the Attorney-General said in a statement today.

Citi Trading Corp., headed by Saxena, obtained the loan fraudulently, Judge Kenneth Mackenzie wrote, citing government documents used to support the extradition request. Saxena used the money to pay personal debts as well as those of his other companies, the judge said. Saxena repaid about 650 million baht.

Saxena told Bloomberg News in a 1997 telephone interview that he took no money from the bank. As an adviser, he had no authority, he said at the time.

Thailand has frozen some assets of Saxena and his associates in the past, including $6.4 million in Jersey island, $4 million in the U.K. and $54 million in Switzerland, Thai prosecutors said today. They successfully retrieved $42 million of that money from Switzerland, the statement said.

“We are trying to bring the remaining frozen assets back as soon as possible,” Thailand’s Attorney-General said.

Earlier Trials

In 2005, Thailand’s Criminal Court sentenced Krirkkiat Jalichandra, the bank’s former president, to 50 years in prison and fined him $472 million. A year later, Thailand’s Anti-Money Laundering Office seized a $2.9 million plot of Saxena’s land, the first of his assets seized in the country, the Bangkok Post reported.

Saxena can’t be prosecuted in Thailand because there isn’t enough evidence, his lawyer, Amandeep Singh, said in an Oct. 28 phone interview.

“We haven’t given up at this point,” Singh said, adding that he would consider his options after a ruling.

Saxena had a stroke in March and is confined to a wheelchair, the attorney said. He didn’t respond yesterday to a request for comment.

“To say that the proceedings in Canada have been protracted would be an understatement,” Mackenzie wrote three years ago.

Record Fight

Thailand sought Saxena’s extradition soon after he arrived in Canada. The 13-year battle has been the longest in Canadian history. Karlheinz Schreiber, a former arms-industry lobbyist, this year lost a 10-year fight against extradition to Germany.

Saxena was free on bail for the first eight years, under what Mackenzie called unusual terms. He was required to pay the cost of supervision, estimated at C$43,000 ($40,028) a month.

Saxena argued he can’t get a fair trial in Thailand and faces possible dangers because of alleged human rights violations in the country, according to Canadian court files.

“There has never been any evidence adduced by the applicant that he, a criminal defendant, faces risk of maltreatment,” British Columbia Judge John Hall wrote May 15 on behalf of a three-member panel that upheld the extradition.

“Allegations that foreign authorities are going to misconduct themselves in relation to a fugitive should not be given credence in the absence of evidence,” the judge wrote.

To contact the reporters on this story: Daniel Ten Kate in Bangkok at dtenkate@bloomberg.net; Joe Schneider in Toronto at jschneider5@bloomberg.net.

Last Updated: October 30, 2009 02:01 EDT