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Skip Navigation LinksHome :: Back Issues :: Thai prime minister’s day in court

July 2001

Thai prime minister’s day in court





       
Thaksin Shinawatra
Is Thailand's prime minister Thaksin Shinawatra just an entrepreneurial businessman in a hurry, anxious to bring to the country the same benefits that he won in the telecoms business, where he became a US dollar billionaire and one of world's richest 500 people in quick time? Or does he just love power so much that he will do anything to keep it?
Bangkok's newspapers and political circles were full of both claims last month after the prime minister abruptly sacked the respected governor of the Bank of Thailand, Chatumongkol Sonakul.
Supporters of Thaksin claim that the central bank governor had to be removed because he did not support raising interest rates, which the government believes is a way of getting the economy moving.
Chatumongkol had fought fiercely for the independence of the central bank and had also clashed with the previous government of Chuan Leekpai.
Critics of the governor also say he was too outspoken. "He is an arrogant so-and-so, a typical finance ministry bureaucrat," claims one young official who approves of Thaksin's action. "The question of interest rates is interesting, but was not the key. The main issue was the bank governor's constant criticisms of government policies.
What chief executive of a country could tolerate the constant public criticism of his policies in which Chatumongkol indulged. He had to go since he was disruptive."
That's the charitable way of looking at it. A senior Bangkok banker, nervous of being identified with his criticisms, claims, "It was about power pure and simple. Thaksin does not like people who won't go along with him, so the bank governor had to go," - and the banker emphasises his point by making a chopping motion with his hand as if cutting off a head.
On the question of interest rates, the new governor of the central bank, Pridiyathorn Devakula, who moved over from being president of the Export-Import Bank, is being careful. Asked about a rate rise, he says: "We have to ask whether it will hurt foreign reserves or currency stability. If not, and if it helps our currency and reserves, and is complementary to our economic stimulus policies, then we should support it." He says he has never indicated that he would tell commercial banks to increase lending. But, significantly, Pridiyathorn does say he will try to improve working relations between the central bank and the government. He says differences of opinion between his predecessor and the prime minister have given Thailand a negative image.
The dismissal of the Bank of Thailand chief led to a spate of rumours and reports that the prime minister had a list of other prominent financial leaders that he was keen to get rid of. Top of the list were said to be the heads of the Securities&Exchange Commission and of the stock exchange. However, Thaksin himself denies he had any intention of sacking the SEC chief. "This is just a rumour," he claims, saying he admires the work that Prasarn Trairatvorakul had done as head of the regulatory body.
But the prime minister also faces a threat to his continued tenure in office from an embarrassing direction. The national counter-corruption commission ruled in December that Thaksin made false declarations of his personal assets when a minister in a previous government. If the constitutional court supports the finding, Thaksin will be barred from public office for five years and will lose his job.
Legal and political experts agree that this is not merely a crisis for Thaksin but a constitutional crisis for Thailand. After all, could the court disqualify a man who had just been elected to power by a huge majority and was head of the first stable government in modern Thai history? On the other hand, could the court disregard the attempts, enshrined in the latest constitution, to clean up the country's notorious political system, traditionally riddled with favouritism and corruption?
Thaksin deliberately kept a high profile before his court appearance. He was mobbed by admiring crowds, underlining his popular backing, and held meetings with foreign leaders, a reminder that he is chief executive of Thailand. When he appeared before the court, he laughed, he got indignant and pleaded for his political life.
Reporters were split as to whether he actually cried or just became red-eyed with emotion. He mentioned his strong political support, emphasized Thailand's need for a strong leader and said his mother had convinced him always to be honest. "The court will decide whether to allow this prime minister to serve the people and the country," he concluded.
His supporters claimed there should not be an issue of corruption because Thaksin came by his money honestly. They also assert that the money involved was only a fraction of his wealth. The biggest omissions involved shares worth tens of millions of dollars that were transferred to his domestic servants.
Thaksin admits that the declarations were inaccurate but claims it was not his fault. At one stage he blamed his wife, saying that she paid more attention to these matters than he did.
How the money was obtained is not the issue, pointed out the secretary general of the counter-corruption commission. The failure was in making a false declaration of assets, making a mockery of the disclosure rules. He claimed that Thaksin did this on purpose to avoid taxes.
The constitutional court, which is due to rule in the next few weeks, faces a delicate task. In similar cases involving politicians it has based its judgments on two issues - whether the declarations were false and whether the accused had a motive for covering up the true assets. Thaksin did not address the claim that, by using servants as proxies, he was able to avoid securities restrictions.
The problem is compounded because the 1997 constitution wants the emergence of stable governments - such as Thaksin's - as well as clean ones.






Dear Sirs, In view of what seems to be happening internationally with banks at the moment, I was wondering if you could advise me. If one of my cheques is returned marked ‘insufficient funds,’ how do I know whether that refers to you or to me?

A letter by a customer to a bank seen by Euromoney. One can’t help feeling that the balance of power in the relationship has changed somewhat

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