By Panu Wongcha-um and Panarat Thepgumpanat
BANGKOK (Reuters) - Thailand's Constitutional Court on Friday dissolved an opposition political party that has been critical of the military establishment and banned its charismatic leader from politics for 10 years over a loan he gave the party.
The dissolution of the Future Forward Party comes less than a year after Thailand held a general election to end five years of military rule and it strengthens the position in parliament of a coalition led by Prime Minister Prime Minister Prayuth Chan-ocha, the former junta leader who first took power in a 2014 coup.
Future Forward, led by auto-parts billionaire heir Thanathorn Juangroongruangkit, 41, has been sharply critical of military dominance of politics. It surprised many by coming third in the elections last year, winning the support of many young people and 81 of the 500 seats contested in parliament.
The court ruled that the party broke the law by taking a 191.2 million baht ($6.08 million) loan from Thanathorn.
"The party is ordered to be dissolved according to the 2017 political party law," Constitutional Court Judge Panya Utchachon said in his ruling.
The court also banned Thanathorn and 15 other party executives from politics for 10 years.
The party and Thanathorn have denied any wrongdoing
Most of the party's members of parliament will retain their seats and can form a new party, but the ban on its leaders will reduce the opposition's votes and its ability to block Prayuth's agenda.
Some Future Forward supporters at the party's headquarters burst into tears when the court's decision was announced.
"I’m a bit loss at the moment. If Thanathorn decides to continue the fight, we will stick with him. We won't let him fight alone,” said Wanna Butrkan, 55, from Udon Thani province in the northeast.
Thanathorn, who was not in court, was due to speak to supporters later in the day.
'NO ONE FOOLED'
Human rights groups and democracy advocates condemned the court's decision.
"Last year’s election was supposed to bring an end to military rule in Thailand, but after today no one is fooled into believing this is the case," said Francisca Castro, a Philippine lawmaker and member of ASEAN Parliamentarians for Human Rights.
Prayuth's pro-army party came first in the March 2019 election but opposition parties say electoral laws written by the junta were designed to give the military establishment control over politics.
The court on Friday said the loan to the party amounted to a donation because it did not follow commercial practices in lending. The election law limits donations from an individual to 10 million baht ($318,167).
Thanathorn said the financial arrangements between himself and the party were above board.
"If we could turn back time ... we would do the same thing because it was transparent and verifiable," he said in a Facebook post this week.
It was not the first legal case that Thanathorn and his party have faced since bursting onto the political scene.
Last month, the Constitutional Court rejected accusations the party sought to overthrow the monarchy, an allegation that could have seen it banned.
Late last year, Thanathorn was suspended from parliament by another court ruling that found he breached election law after he was accused of holding shares in a media company when he registered as a candidate. He said he sold the shares before registering.
While Future Forward and its allies say the political system has been engineered to ensure rule by Prayuth's pro-army party, the prime minister says a constitution drawn up during military rule is necessary to ensure stability after years of chaos and occasional violence.
(Reporting by Panarat Thepgumpanat and Panu Wongcha-um; Editing by Robert Birsel)