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Published on February 27, 2008

Businessmen are hoping the case of House Speaker Yongyuth Tiyapairat would not cause the People Power Party (PPP) to be dissolved as that would sink confidence among foreign investors.

Pornsilp Patcharintanakul, secretary-general of Board Of Trade of Thailand, said if the party was dissolved, foreign investor confidence would be hit hard and they could delay investment plans.

"Thai businessmen understand this situation well," Pornsilp said.

Rut Subniran, a member of Thai Rice Packers Association, said the Election Commission's (EC) decision to seek Yongyuth's disqualification should not lead to the dissolution of the party, which is the core of the coalition government.

"The PPP has a number of able people to fill Yongyuth's shoes, but if the EC's decision leads to a re-election, private enterprises would be ready to honour the decision as we all understand that it is based on fairness," he said.

Yesterday, the Stock Exchange of Thailand Index plunged 11.91 points at mid-day, as investors were worried of the possible dissolution of the PPP after the EC ruled that Yongyuth had violated election laws.

SET President Patareeya Benjapholchai said the impact would be short-term, but worries would linger until the court rules on the case. "It remains unclear how the judgement will affect the market."

Thanawat Patchimkul, executive vice president for institutional sales of Seamico Securities, said investors were anticipating a risky political situation following the EC's resolution.

He said although the issue would be forwarded to the Supreme Court, the court is expected to ask the EC if the resolution would lead to the dissolution.

"If the party is dissolved, a new general election will take place and I believe that those people in power will be re-elected, but there are uncertainties if the dissolution will derail the economic policies that the party has laid out," he said.

Santi Vilassakdanont, chairman of the Federation of Thai Industries, said the EC's decision will have no effect on business confidence as this would not derail economic policies.

He declined to comment on the scenario of PPP being dissolved and Prime Minister Samak Sundaravej being forced to step down.

Boon Vanasin, a former advisor to Matchima Thipataya Party, expected that in the worst-case scenario, the Cabinet would be reshuffled when the executives of PPP were found guilty and banned from ministerial posts.

"The Constitution paves the way for politicians to switch to other parties within 30 days. This guarantees there will be no re-election. The process to dissolve the party would be time-consuming,"

he said.

Petchanet Pratruangkrai,

Siriporn Chanjindamanee

The Nation