Ex-Thai leader's wife found guilty of tax evasion

Pojaman Shinawatra, wife of deposed Thai Prime Minister Thaksin Shinawatra, leaves criminal court in Bangkok, Thailand, Thursday, July 31, 2008. Pojaman Shinawatra was found guilty of evading millions of dollars in taxes and sentenced to three years in prison. (AP Photo/Sakchai Lalit)

BANGKOK, Thailand—The wife of ousted Thai Prime Minister Thaksin Shinawatra was convicted Thursday of evading millions of dollars in taxes and sentenced to three years in prison -- a major setback for one of the country's most powerful men.

But most analysts acknowledge the verdict -- the first in a string of corruption cases against Thaksin and his family -- will not derail the former leader. The ruling is also unlikely to bring down the government, though it could provide fresh ammunition for critics who have accused Prime Minister Samak Sundaravej of being a proxy for Thaksin.

"This would embolden the protesters and galvanize them," Thitinan Pongsidhirak, a political scientist at political scientist at Bangkok's Chulalongkorn University, referring to daily protests in Bangkok. "The government is now doing everything, including reshuffling the Cabinet, to prolong its life."

The 51-year-old Pojaman Shinawatra, in a pale blue suit and strand of pearls, looked stunned as the judge announced the verdict. Thaksin, standing alongside his two daughters, appeared crestfallen, a frown frozen on his face.

Pojaman was promptly released on $149,000 bail. As more than 1,000 supporters cheered her on, Pojaman walked out of the Bangkok Criminal Court with her family into a waiting car.

Thaksin, who was ranked as Thailand's fourth-richest billionaire in 2006 before the coup, is now the 16th richest in the country, according to Forbes Asia Magazine. No longer a billionaire, he is now worth $400 million after Thai authorities froze more than $2 billion of his family's assets pending the corruption cases against him.

Neither Pojaman nor Thaksin commented to the throngs of reporters. But Thaksin's spokesman, Pongthep Thepkanjana, said the family planned to appeal the verdict within a month.

"Thaksin is not disheartened," he said. "They respect the court ruling but it is not the end. We will fight until the end." Despite the ruling, Thaksin will leave as scheduled on Thursday for Japan and continue on to the Beijing Olympics.

While it remained unclear whether Pojaman would ever go to jail, analysts said the verdict sent a strong message to Thaksin and his inner circle that the judiciary would hold them accountable and his days of impunity may be over.

"The ruling shows that there is still justice in this country. We can still rely on the judiciary to delivery a fair verdict," said Prapan Kunmee, one of the protest leaders, amid cheers from the crowd of hundreds of anti-government demonstrators who have been camped out since May on a street in Bangkok's historic section.

The case Thursday is the first of several corruption lawsuits against Thaksin and his family. Four corruption cases have been filed in the courts against Thaksin, two others against his wife, and three cases against two of his children. Many others are under investigation.

Thaksin denies all wrongdoing.

The future would seem bleak for Thaksin, but even his critics say it is too early to count him out.

Despite being ousted in a 2006 coup, he remains hugely popular especially among rural voters and wields tremendous influence with the government behind the scenes. He returned earlier this year from self-imposed exile, after his political allies in the People's Power Party set up a coalition government.

"This is the beginning of the end of Thaksin era but of course, Thaksin's influence is still lingering in Thai society," said Kavi Chongkittavorn, a senior editor at The Nation newspaper and former head of the Thai Journalist Association, told AP Television News. "He still has people who support him."

Pojaman, her adopted brother Bhanapot Damapong, and her secretary were convicted of colluding to evade millions of dollars in taxes in 1997 through a complicated transfer of shares in the family's flagship business that involved placing stocks in the name of one of the family's maids.

The court sentenced Pojaman, her brother and secretary to two years in prison for fraud and conspiring to evade taxes. Pojaman and her brother were handed an additional one-year term for giving false testimony. All three had pleaded innocent.

The transfer of shares was valued at 738 million baht, about $22.2 million at the current exchange rate.