New York - John Thain, the former head of Merrill Lynch who resigned January 22 after record losses at the brokerage, will repay 1.2 billion dollars spent on redecorating his office last year, he told CNBC Monday evening.

Thain, 53, stepped down from the brokerage last week after it registered even sharper losses than had been anticipated. The former investment bank had already been brought up by Bank of America last year in an effort to save Merrill Lynch in the midst of the ongoing financial crisis.

Against that background, the news of the redecorating work had become an embarrassment for Thain and the bank. However, he insisted during the interview that the plans for the work in his office, two conference rooms and a reception area had been made in a different business environment.

Thain also rejected criticism that he had not alerted investors about the losses at Merrill Lynch in a timely fashion. The bank reported losses of 15.4 billion for the fourth quarter of 2008.

He also said Bank of America was aware of bonus payments paid out to Merrill Lynch employees, a controversial move as US politicians have called for banks to rein in costs as they suffer losses in the financial crisis. (dpa)