Thailand’s Constitutional Court has suspended Prime Minister Paetongtarn Shinawatra from office until it rules on a petition seeking her ouster for alleged ethical violations — the biggest blow yet to her less-than one-year-old government.
Paetongtarn’s powers will be suspended from Tuesday while the nine-member court considers the petition by a group of senators, it said in a statement. The decision to suspend her duties was backed by seven out of nine judges, according to the statement.
The petitioners allege that the prime minister’s comments in a leaked phone call with former Cambodian leader Hun Sen constitute a violation of ethical standards — grounds that could lead to her dismissal. The embattled premier has 15 days to respond to the charges, the court said.
The baht fell on the news, while the yield on benchmark 10-year bonds edged lower. The benchmark stock index, among the world’s worst-performing major equity markets globally this year, rallied as much as 1.8% on expectation Paetongtarn’s suspension will help reduce politician tension.
Suriya Juangroongruangkit, a deputy prime minister and transport minister, will be the acting leader, according to officials. The suspension came just hours after Paetongtarn had unveiled a new cabinet line-up that was meant to shore up support of allies in her coalition government.
The court blow is the biggest threat yet to Paetongtarn’s nascent political career after she came to power. Her predecessor, Srettha Thavisin, was ousted last year in a similar ethics-related case.
The youngest daughter of influential former premier Thaksin Shinawatra, Paetongtarn had resisted calls to resign over the leaked phone call, in which she criticized the Thai army’s role in a border standoff with Cambodia. She’s the third member of the influential Shinawatra clan to lead the country.
Dynastic Rule
“This could be the end of the Shinawatra dynasty,” said Titipol Phakdeewanich, a political science lecturer at Ubon Ratchathani University. “The court’s decision is unsurprising given the opposition against the prime minister has been getting stronger and the nature of the allegations.”
The suspension came days after thousands of protesters rallied in Bangkok demanding her resignation. The political turmoil dented the 38-year-old prime minister’s popularity. Support for Paetongtarn fell to single digits in a recent opinion poll, with only 9.2% of respondents backing her, according to a June 19–25 survey by the National Institute of Development Administration.
While the court decision may ease the threat of any further escalation in protests, it could sour investor sentiment toward Thai assets, already weighed down by concerns over economic growth slowing to a post-pandemic low. The political uncertainty will also affect U.S. tariff talks which are set to gather momentum this week.
Investors have sold a net $2.3 billion in Thai equities this year, while the country’s benchmark index has dropped about 22%, making it one of the worst-performing major stock markets globally.
Paetongtarn said she accepted the court decision, and her actions were with the country’s best interest at heart.
Her legal challenges are far from over. Her opponents have also approached the anti-graft agency and the Election Commission in efforts to force her removal.
Meanwhile, the border dispute with Cambodia has intensified, with both countries enacting tit-for-tat measures to restrict trade and cross-border movement. Last week, Hun Sen — father of current Cambodian Prime Minister Hun Manet — called for a leadership change in Thailand, saying he doubted Paetongtarn’s ability to resolve the escalating conflict.
This story was originally featured on Fortune.com
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