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THAILAND: Thai PM shrugs off shares sale protests

by Amy KazminFinancial Times
February 6th, 2006

Thaksin Shinawatra, Thai prime minister, this weekend declared he would not bow to pressure and step down from office, even as tens of thousands of protesters gathered in Bangkok to demand his resignation.

The protest, the biggest political demonstration in Thailand in more than a decade, came as the information and technology minister resigned from her position, the second member of Mr Thaksin's government to leave in three days.

Mr Thaksin has faced a worsening political crisis since his family sold its 49 per cent stake in Shin Corp, the telecom-to-airline conglomerate he founded, to Temasek, the Singapore state investment agency, for Bt73bn ($1.8bn, 1.5bn, 1bn).

In his weekly national radio address, however, Mr Thaksin - who won a landslide re-election victory just over a year ago - said that only a direct request from Thailand's revered King Bhumibol Adulyadej could persuade him to leave office.

"If I were to resign, that would mean that I betrayed the more than 19m voters who elected me to the office," the premier said. "Only one person can tell me to resign: his majesty the king. If the king merely whispers to me, 'Thaksin, you resign,' I will resign right away."

Hours after Mr Thaksin's defiant message, tens of thousands of protesters, led by media mogul Sondhi Limthongkul, gathered in Bangkok calling for the premier's ouster.

"Over the last five years, Thaksin has run the country just to benefit his firms' listed value," Mr Sondhi told the crowd. A former Thaksin supporter, Mr Sondhi is now one of the premier's fiercest critics.

The rally, with an estimated 50,000 people, was the biggest since protests in May 1992 against a former military dictator, but was still smaller than organisers had hoped.

Many Thais stayed away from the demonstration, fearing violence, but the event passed off peacefully.

The prime minister, who has been dogged by "conflict of interest" allegations throughout his tenure, had hoped the sale of the Shin Corp stake would end criticism that he used hispolitical influence to protect the family business, which was transferred to his children and other relatives shortly before he took office in 2001.

But the deal - the largest corporate takeover in Thai history - appears to have backfired in political terms.

Many Thais see Mr Thaksin, founder of the nationalist Thai Rak Thai (Thais love Thais) party, as having sold strategic national assets to a foreign government, while others are galled that the proceeds of the sale are tax free.

On Friday, Uraiwan Thienthong, Thailand's culture minister and the wife of a leader of a faction within Mr Thaksin's ruling party, resigned from her position, citing her responsibility to uphold good governance.

The next day she was followed by Sora-at Klinpratoom, the information and technology minister and another member of the same rebellious faction. The move could signal further defections from the faction-ridden ruling party.

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