Thai graft agency rules against ex-PM as 'red shirts' head for Bangkok

BANGKOK Thu May 8, 2014 7:23am EDT

Thailand's Prime Minister Yingluck Shinawatra greets her supporters as she leaves the Permanent Secretary of Defence office in Bangkok May 7, 2014. REUTERS/Athit Perawongmetha

Thailand's Prime Minister Yingluck Shinawatra greets her supporters as she leaves the Permanent Secretary of Defence office in Bangkok May 7, 2014.

Credit: Reuters/Athit Perawongmetha

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BANGKOK (Reuters) - Thailand's anti-graft agency indicted former Prime Minister Yingluck Shinawatra for negligence on Thursday, a ruling that came a day after a court threw her out of office and could kill off any hopes she has of staging an electoral comeback.

Thousands of her loyalists were converging on the capital as the National Anti-Corruption Commission's announced its decision to press ahead with charges related to a financially ruinous state rice-buying scheme.

The blows delivered on successive days by the commission and Thailand's Constitutional Court are the latest twists in a struggle for power between Thailand's royalist establishment and Yingluck's brother, ousted former premier Thaksin Shinawatra.

"The committee has investigated and there is enough evidence to make a case ... We will now forward it to the Senate," the National Anti-Corruption Commission (NACC) president, Panthep Klanarongran, told reporters.

If found guilty by the Senate, Yingluck could be banned from politics for five years. Several other members of the family and about 150 of Thaksin's other political allies have been banned for five-year terms since 2007.

Yingluck's removal from office by the Constitutional Court on Wednesday for abuse of power followed months of sometimes deadly protests in Bangkok aimed at toppling her government and ending elder brother Thaksin's influence.

Thaksin, a billionaire former telecommunications tycoon who has won the unswerving loyalty of legions of Thailand's rural and urban poor, lives in exile to avoid a 2008 jail sentence for abuse of power, but he looms over politics.

The Constitutional Court, which removed two previous pro-Thaksin prime ministers in 2008, ruled that Yingluck and nine of her cabinet ministers had abused power in 2011 over the transfer of a security agency chief.

However, the court left the Shinawatras' ruling party in charge of a caretaker administration intent on organizing a July 20 general election, which Yingluck's party would likely win.

RICE SCHEME

The rice subsidy scheme that is the focus of the anti-corruption commission case was a flagship policy of Yingluck's administration, aimed at helping her rural supporters, under which the state paid farmers way above market prices for their crops.

But the government could not sell much of the rice it quickly stockpiled and was unable to pay many farmers.

"The scheme incurred huge losses and had weaknesses and risks at every level from the registration of farmers to the sale of the rice," Commissioner Vicha Mahakun told reporters.

Activists from both the pro- and anti-government sides are planning big rallies in Bangkok in the coming days, raising fears of clashes. Twenty-five people have been killed since the protests began in November.

"This is the first time both sides will protest near each other and each have hardcore elements, which is extremely worrying," said political analyst Kan Yuenyong at the Siam Intelligence Unit think tank.

Grenade attacks and sporadic gun battles have become increasingly frequent as the crisis has dragged on. There were four grenade or small bomb blasts in Bangkok on Wednesday night, including one at the home of a Constitutional Court judge. No injuries were reported, police said.

MESSAGE TO ELITE

The military, which has a long history of intervening in politics, has said it will try to stay out this time but would step in if violence worsened. Army spokesman Winthai Suvaree said there were no plans to increase troop numbers in Bangkok.

One undercurrent of the crisis is deep anxiety over the issue of royal succession. King Bhumibol Adulyadej, the world's longest-reigning monarch, is 86 years old and spent the years from 2009 to 2013 in hospital.

Crown Prince Vajiralongkorn does not command the same devotion as his father.

Pro-government "red shirt" supporters of the Shinawatras accuse the royalist establishment of "conspiring to overthrow elected governments" at a time when the traditional order in Thailand is waning.

"I would like to send a message ... from the red shirt people of the land to the elite that the person ... we are fighting is Prem Tinsulanonda," red shirt leader Jatuporn Prompan said in a blunt televised statement on Thursday.

Prem is a retired general and former prime minister and head of the king's Privy Council, an appointed body that advises the monarch. Thaksin loyalists accused Prem of masterminding the 2006 coup that overthrew Thaksin. Prem denied that.

Phuttiphong Khamhaengphon, a red shirt leader in the northeastern city of Khon Kaen, said as many as 100,000 people would head to Bangkok by bus and pick-up truck from the region, to join a rally on Saturday.

Supporters of the Shinawatras in their hometown of Chiang Mai in the north also said 100,000 people were heading to Bangkok for the rally.

The anti-government side has vowed to launch a "final push" to rid the country of Thaksin's influence on Friday.

More turmoil could further undermine Southeast Asia's second-largest economy, already teetering on the brink of recession amid weak exports, a year-long slump in industrial output and a drop in tourism, presided over by a caretaker government with curtailed powers.

Consumer confidence fell to its lowest level in more than 12 years in April as the crisis took its toll.

Yingluck dissolved parliament in December and called a snap election but the main opposition party boycotted it and anti-government activists disrupted it so much it was declared void.

Yingluck and the Election Commission agreed last week a new ballot should be held on July 20, but the date has not been formally approved and it is bound to be opposed by the anti-government protesters.

Thaksin or his loyalists have won every election since 2001.

The anti-government protesters say Thaksin buys elections and, to end his hold over politics, they say reform of the electoral system has to be implemented before new polls.

(Additional reporting by Martin Petty; Writing by Robert Birsel; Editing by Alex Richardson and Alan Raybould)

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