Top Thai court hits Thaksin over Myanmar loans
Thursday, 31 July 2008

BANGKOK,July 30 ( - Thailand's Supreme Court said on Wednesday it would hear a case against ousted Prime Minister Thaksin Shinawatra relating to allegations he arranged soft loans to Myanmar while in office to benefit his family's telecoms business.

The court's decision is the latest blow to Thaksin's bid to clear his name after his removal in a 2006 military coup, in which he was accused of "rampant corruption".

Given the general perception that he is the driving force behind the coalition that came to power after an election in December, it is also another blow to an administration already being hammered by the courts, nationalists and an ailing economy.

An army-appointed graft panel has accused Thaksin of ordering a state bank in 2004 to increase the size of a loan to the military-ruled former Burma to buy telecoms equipment from a company owned by Thaksin's family.

The deal caused the bank to lose 670 million baht ($20 million), the panel alleged. Thaksin has denied any wrongdoing.

Prime Minister Samak Sundaravej is expected to reshuffle his cabinet this week, although it is hard to see the move deflecting criticism from an administration under attack for being a Thaksin proxy.

A small party announced its departure from the coalition on Tuesday, but Samak said this would not derail his plans to submit a list of new ministers to the king for approval.

"It won't affect the cabinet reshuffle," he told reporters in answer to a question about the withdrawal of the Pue Pandin (For the Motherland) party from the coalition.

Announcing the departure, Pue Pandin boss and Industry Minister Suvit Khunkitti criticized Samak's push to amend the 2007 army-designed constitution and his handling of the economy at a time of stuttering growth and decade-high inflation.

"We think amending the constitution is less important than tackling the economic problems," Suvit said. "But when parliament convenes in August, the government is going to amend the charter."

He also had scathing words for the government's conduct in a nationalist spat with Cambodia over competing claims to a 900-year-old Hindu temple on their border.

Samak has kept unusually quiet about the planned new line-up, saying only that it will involve 10 portfolios.

A respected career diplomat, Tej Bunnag, was appointed foreign minister at the weekend to replace Noppadon Pattama -- Thaksin's lawyer -- who was forced to resign over the Preah Vihear temple dispute with Cambodia.

However, newspapers are speculating that Samak's new cabinet will contain a host of Thaksin loyalists.

"The names of new ministers being speculated on in the newspapers suggest that those who have been loyal to Mr. Thaksin are being favored," political commentator Sukhum Nuanskul told Reuters.

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