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Attempt to shield bureaucrat from inquiry sparks fury

Efforts to pin corruption charges on deposed prime minister Thaksin Shinawatra  have opened up a rift within Thailand's interim government, which is under increasing pressure to show quick results.

The rift has pitted Finance Minister Pridiyathorn Devakula,  an ambitious former banker, against outspoken auditor-general Jaruvan Maintaka.  The two have clashed publicly during the probe into alleged wrongdoing by Mr Thaksin and his family during his five years in office.

The row has also raised the question of whether senior civil servants should be prosecuted for any dubious decision taken by their departments.

Last week, investigators on a special committee set up by the coup leaders claimed Mr Thaksin's children had dodged taxes on the US$1.9 billion sale of their family-owned Shin Corp to Singapore's Temasek Holdings in January.

It was the first substantial blow struck against the ousted premier, who initially lived in exile in London and now is in Beijing. The tax bill, including fines and late fees, could amount to more than US$250 million.

The sale of Shin Corp to Temasek was the spark for anti-Thaksin rallies in Bangkok that snowballed earlier this year. The deal was structured through an offshore shell company, allegedly to avoid capital gains tax.

A lawyer for the Shinawatra family said on Saturday his clients would co-operate in the tax case, and insisted that the exemption was legal.

But as the news of the tax bill emerged, a behind-the-scenes battle was unfolding over the fate of a senior bureaucrat who had ruled that Mr Thaksin's two children were exempt from taxation.

As director-general of the Revenue Department, Sirote Swasdipanich  approved the exemption ruling and defended it publicly, putting him in a difficult spot.

But far from exposing him, Mr Pridiyathorn reportedly tried to shield Mr Sirote from the investigators, who want to know how the decision was reached and who was involved. When that failed, Mr Pridiyathorn quickly announced he had set up a panel to probe the tax exemption. Mr Sirote, who has denied any wrongdoing, will face further questioning this week.

Analysts said Mr Pridiyathorn was anxious to avoid a witch hunt in the bureaucracy that could unsettle the interim administration. Instead, he wants to keep the focus on Mr Thaksin and his political allies.

'The idea is to betray the politicians, not the bureaucrats. They're just following the politicians, so it's not their fault. That's the logic,' a foreign analyst in Bangkok said.

But this protective stance has infuriated Ms  Jaruvan, a dogged anti-graft campaigner who has used the Thai media to leak sensitive information.

In a calculated strike at Mr Pridiyathorn, she recently called for a crackdown on government officials being paid to sit on the boards of state companies. To his embarrassment, Mr Pridiyathorn was quickly revealed as among those who sat on multiple boards.

Mr Pridiyathorn also raised eyebrows last month by defending the sale of land in Bangkok to Mr Thaksin's wife.

But Ms Jaruvan's feisty approach has unnerved military powerbrokers. One Thai commentator called her 'a problem child for the ruling junta'.



Thaksin tax probe divides kingdom's interim leaders