Key Thai tax case could decide ousted Thaksin fate

Bangkok, Mar 26: Prosecutors charged the wife of former Thai Prime Minister Thaksin Shinawatra and her brother today with tax evasion in a case which could finish off the charismatic billionaire politically.

A verdict of not guilty against Potjaman Shinawatra, her brother and her secretary would undermine seriously the military leaders who staged a bloodless September coup accusing him of presiding over rampant corruption.

''If they are found guilty, even by the first-level court, the public will believe this family conspired to evade tax and this political harpoon will end Thaksin's political career,'' political commentator Sukhum Nualskul told Reuters.

''But if they are ruled not guilty, the legitimacy of the coup leaders and their graft investigators will be in jeopardy.'' The three, later released on bail, were charged in court and the trial of the first of more than a dozen investigations of alleged wrongdoing during Thaksin's five years in power to reach court would start on May 14, Potjaman's lawyer said.

Arriving at Bangkok's Criminal Court in a dark blue luxury car, Potjaman had to pass through a mass of journalists as 100 policemen stood by.

She, her brother and the secretary could face up to 14 years in jail over a transfer of shares in what is now Shin Corp, the firm Thaksin founded, in the first case brought by investigators appointed by coup leaders six months ago.

They face jail terms of between three months and seven years and fines of between 2,000 baht () and 200,000 baht (,700), but Potjaman and her brother face two counts of the same crime, so the penalty would be doubled, prosecutors said.

Complaints about the slowness of the investigation into allegations of corruption under Thaksin have dogged the government installed by the military and contributed to its sharp decline in popularity as measured by opinion polls.

More To Come?

In November, graft investigators ordered the Revenue Department to tax her brother Bannapot almost million on 4.5 million shares he bought from a Shinawatra maid with money given to him by Potjaman in 1997.

The investigators ruled the deal, decreed tax-free at the time as a gift on a special occasion, was a handout by Potjaman to her brother, who was then chairman of what is now Shin Corp, and must be taxed.

Now the same transaction is subject to criminal charges and may not be the last.

Thaksin's family sold its controlling stake in Shin Corp, the telecommunications giant he founded as a computer supplier, to Singapore state investment firm Temasek for .9 billion in January 2006.

The deal, which cost Temasek .8 billion in all, was deemed tax-free at the time because it was done through the stock market, where no tax is charged on share transactions.

But the graft panel, which is authorised to freeze assets, is investigating whether complex share transactions leading to the final deal may have been illegal.

The panel has also accused Potjaman of underpaying for a prime piece of Bangkok real estate bought from the central bank.

It concluded that Thaksin and his wife had broken laws barring spouses of cabinet ministers from business deals with state agencies and they face up to 10 years in jail and confiscation of the land if found guilty.

But any trial on the land deal is still months away. The panel says it wants to hear Thaksin's side of the story before sending its findings to prosecutors.

Thaksin is in exile and the government says he cannot return until after elections, promised for late this year, unless summoned by the courts to give evidence.

Reuters