Bombs Hit Bangkok Bank After Thai Court Seizes Thaksin Money
February 28, 2010, 2:22 PM ESTBy Daniel Ten Kate and Suttinee Yuvejwattana
March 1 (Bloomberg) -- Thai security forces were on alert following bomb attacks on Bangkok Bank Pcl that came after a court seized about $1.4 billion from fugitive former Prime Minister Thaksin Shinawatra.
Four branches of Thailand’s biggest bank were targeted late on Feb. 27 with grenades, two of which exploded. Nobody was hurt in the attacks, which shattered glass and damaged buildings.
“There is only a small group of people who want to create unrest in the country,” Prime Minister Abhisit Vejjajiva said yesterday in his weekly television address. “We shouldn’t fall victim to them.”
Competition for political power between Thaksin’s generally rural and poorer supporters and largely urban and more middle class opponents has prompted unrest in Thailand since the coup that ousted him in September 2006. Protests by the two sides have included airport blockades, rioting and bombings.
“The government will do everything it can to control the situation,” Abhisit said. “We will increase checkpoints and patrols. The police may not have enough officers, so we will ask for more people from the military.”
Nine Supreme Court judges decided on Feb. 26 to seize 46.4 billion baht ($1.4 billion) of the 76.6 billion baht that Thaksin’s family earned from the 2006 sale of holding company Shin Corp. to Singapore’s Temasek Holdings Pte. The court returned 30.2 billion baht to the former premier.
Thaksin Supporters
Thaksin’s supporters rallied in front of Bangkok Bank’s headquarters last month to protest its links with Prem Tinsulanonda, the president of King Bhumibol Adulyadej’s Privy Council, who has also served as an adviser to the bank. Thaksin has accused Prem of masterminding the coup, a charge he has denied.
King Bhumibol, the world’s longest reigning monarch, has been hospitalized since Sept. 19 with symptoms of pneumonia. The 82-year-old head of state visited a Bangkok palace for about four hours on Feb. 27 before returning to the hospital, the Associated Press reported yesterday, citing an unidentified palace official.
The pro-Thaksin United Front for Democracy Against Dictatorship aims to gather 1 million people in Bangkok later this month to push for a fresh election. The group urged its supporters to accept the verdict against Thaksin “with cold, angry silence.”
Thaksin said the ruling was “100 percent politically motivated” and urged his supporters to continue fighting the government. The former prime minister lives overseas after fleeing a two-year prison sentence in 2008.
Continue Fighting
The verdict may boost Thai stocks, which trade at 10.9 times 2010 earnings, the third-cheapest in Asia. Thailand’s SET Index has lagged behind benchmarks in Indonesia, Malaysia, the Philippines and Vietnam this year. Markets are closed today in Bangkok for a holiday.
“The market will rise as political tension has eased,” Prapas Tonpibulsak, chief investment officer at Ayudhya Fund Management, said immediately after the verdict. “Upside will probably be limited as conflicts remain.”
Foreign investors, net sellers of $98 million of Thai stocks this year, bought a net $58 million on Feb. 25, the most since Oct. 9, according to stock exchange data. The baht on Feb. 26 gained on optimism an economic recovery is gathering pace after industrial production rose for a fifth straight month in January.
After Thaksin founded Shin Corp. in 1983, its units were awarded one of two mobile-phone concessions and an exclusive satellite franchise. The company controls Advanced Info Service Pcl, Thailand’s top mobile-phone operator, and satellite services monopoly Thaicom Pcl.
Court Findings
The court said Thaksin benefited Shin-controlled companies by lowering Advanced Info’s royalty payments to the state-owned telecoms operator and approving a government loan to Myanmar, part of which was used to buy equipment from Thaicom.
Shin shares gained 121 percent from when Thaksin took office on Feb. 9, 2001, to when his family sold the company on Jan. 23, 2006, compared with a 128 percent gain in the benchmark SET index, according to data compiled by Bloomberg. Siam Cement Pcl, Thailand’s fourth-biggest company, which is controlled by the monarchy’s investment arm, gained 717 percent in that time.
Thaksin’s supporters say the constitution drafted after the coup gives too much power to appointed figures such as soldiers, judges and royal advisors at the expense of elected politicians. Thaksin and his allies have won the past four elections on heavy support from the northeast, Thailand’s poorest region and home to a third of its 66 million people.
Balance of Power
Since the 2006 coup, courts have disbanded parties linked to Thaksin that won the past two elections. The rulings have eroded confidence in the judicial system among Thaksin’s supporters, who say different standards are applied to their opponents, who seized the prime minister’s offices and the airports two years ago. Prosecutors have yet to bring those cases to trial.
Thaksin’s supporters want the constitution changed to eliminate a half-appointed Senate and provisions that make it easy to disband political parties. Abhisit, who took power in December 2008 after a court dissolved the pro-Thaksin party that won an election the previous year, has opposed efforts to amend the constitution. He must call an election by the end of 2011.
--With assistance from Anuchit Nguyen in Bangkok. Editors: Mike Millard, Dick Schumacher.
To contact the reporter on this story: Daniel Ten Kate in Bangkok at dtenkate@bloomberg.net; Suttinee Yuvejwattana in Bangkok at suttinee1@bloomberg.net.
To contact the editors responsible for this story: Bill Austin at billaustin@bloomberg.net; Tony Jordan at tjordan3@bloomberg.net
