UPDATE 2-Thai judges say Thaksin abused power for gain

* Thaksin policies benefited family’s businesses, judge
says

* Neither violence nor resolution expected afterwards
(Adds details)

By Martin Petty

BANGKOK, Feb 26 (BestGrowthStock) – Judges reading a lengthy
verdict on whether to seize $2.3 billion of ex-premier Thaksin
Shinawatra family’s assets said on Friday his policies
benefited his family business, raising the likelihood his money
will be confiscated.

Authorities say major violence is unlikely but have
mobilised thousands of police and troops to pre-empt any
backlash by supporters of the 60-year-old fugitive at the
centre of a 5-year political crisis in Southeast Asia’s
second-biggest economy.

Analysts expect the nine-judge Supreme Court to either
seize all of the frozen wealth or to allow Thaksin to keep a
portion of the assets. The latter scenario is seen as more
favourable for markets in the short-run as it lessens the risk
of an imminent showdown in Thailand’s divisive colour-coded
crisis.

“The partial seizure of the assets should be what financial
markets prefer because both sides can claim victory,” said
Prapas Tonpibulsak, chief investment officer at Ayudhya Fund
Management.

(For possible market reactions click on [ID:nSGE61I05K])

Prosecutors say Thaksin and his former wife, Potjaman na
Pombejra, concealed ownership of shares in his family business
Shin Corp (SHIN.BK: ) while in office from 2001 to 2006, and that
he abused power by tailoring policies to benefit the company.

Thaksin, ousted in a 2006 coup and convicted in absentia of
graft, has denied the charges from self-imposed exile in Dubai.

One judge said a Thaksin-era government policy to convert
part of a telecommunications concessions fee into an excise tax
“favoured Shin Corp at the expense of the state”.

A judge also said Thaksin concealed his ownership of stock
in Shin Corp, an argument seen as a main precondition for
deciding there was a conflict of interest in government
policies benefiting Shin Corp, a major telecommunications
business.

“The way it’s going, it looks highly likely he will have
the whole lot confiscated and he’ll not get anything back,”
said Jade Donavanik, dean of the faculty of law at Siam
University.

“The judge has repeatedly said the stock was Thaksin’s
property. Him concealing assets is the entire foundation of
this case, so it’s likely they’ll take it all.”

A final ruling on whether to confiscate any or all of the
assets was due later on Friday. Thailand’s stock market reopens
on Tuesday after a long weekend holiday.

Some analysts say a court verdict unfavourable to Thaksin,
could add weight to allegations he is the victim of a political
vendetta and may spark an angry response from supporters.

‘JUDGMENT DAY’

Security was tight around Bangkok’s Supreme Court on what
has become known as “Judgment Day”, with cellphone signals
jammed to prevent remote-detonated bombings and judges ferried
to the courthouse, some from safe houses, in bullet-proof cars.

Six-hundred police guarded the court. Security agencies
said thousands of riot troops were on standby in case of
unrest.

Political uncertainty has subdued Thailand’s benchmark
index (.SETI: ) in recent weeks, with many traders waiting to see
what the ruling will bring. But foreign investors were net
buyers for four straight days this week, drawn to bargains in
Thailand where stocks are trading at just 10.6 times forecast
2011 earnings, Asia’s cheapest after Pakistan, Thomson Reuters
data shows.

The pro-Thaksin “red shirt” movement, which last April
forced a regional summit to be abandoned and staged
demonstrations that sparked Thailand’s worst street violence in
17 years, plans a mass rally in Bangkok on March 14 but says it
will not protest on Friday whatever the verdict.
[ID:nSGE61N09L]

The delay was widely seen as a move to distance the
movement from any groups that might seek to stir up trouble. A
splinter pro-Thaksin group, “Red Siam”, rallied close to the
court on Friday, but has vowed to remain peaceful.

The “red shirts” accuse authorities of playing up the risk
of unrest. Security agencies have said they are most concerned
outside agitators, or a “third hand”, will trigger violence.

The twice-elected Thaksin says he will fight any seizure of
the assets from exile.

(For a related analysis click on [ID:nSGE61I095]; and for a
factbox on the case click [ID:nSGE61M019])

Although the verdict will turn a new page in an intractable
political crisis that has alarmed many investors, few believe
it will provide any hope of a long-term resolution.

Investing Research

(Additional reporting by Ambika Ahuja; Editing by Jason Szep)

UPDATE 2-Thai judges say Thaksin abused power for gain