"Sondhi could be arrested if he is implicated by police evidence against him, or the investigators could drop the case if he can produce evidence proving otherwise," said a police spokesman.

Meanwhile, the Criminal Court yesterday accepted a criminal libel suit filed by a high-ranking naval officer who has taken deep offence at accusations made by anti-government campaigners during their crusade to oust caretaker Prime Minister Thaksin Shinawatra.

Sondhi and nine other people are under fire from VAM Kiattisak Damapong, a relative of Thaksin's wife, for claiming during anti-government rallies that Thaksin and his relatives were criminals.

At the arraignment hearing, the court heard that Sondhi and the other defendants had told several rallies: "They are all crooks - the whole clan," and made other supposedly defamatory remarks.