Internal Trade Department (ITD) chief Whichai Phochanakij was transferred to an inactive post on Sunday pending an investigation into the export of a large number of face masks just prior to their reclassification as a price-controlled product.
His immediate removal from office was signed by Prime Minister Prayut Chan-o-cha who said in his order the transfer is aimed to "build confidence among people" and show the government is taking the issue seriously.
"We need a probe for transparency," Gen Prayut said.
Commerce Minister Jurin Laksanawisit said during an inspection of mask factories in late January that Thailand had some 200 million masks in stock, enough for four to five months.
However, after the Central Committee on Goods and Service Prices declared face masks price-controlled products on Feb 4, which barred them being sold at above-market rate prices and required exporters to ask permission before selling them abroad, face masks disappeared from shop shelves almost overnight.
Critics suspect details of the reclassification were leaked as part of collusion to export large numbers of the items.
"They [critics] were probably too suspicious," Mr Whichai said in his response to the assumption yesterday.
"Only a few people knew about the announcement and the process was also taken in an urgent manner, so I insist nobody gave out any signal."
Mr Whichai did, however, admit that some domestically produced masks were shipped abroad during that time.
There had been requests for the export of 50 million pieces, but "only between five and six million of them got a green light" under certain conditions, he said.
Asked to respond to his transfer, Mr Whichai said: "I'm not hurt by the prime minister's order though I've worked hard to solve face mask problems."
Last week, Finance Minister Uttama Savanayana apologised over erroneous statements made by the chief of the Customs Department regarding face mask exports and asked the agency to rectify the matter.
His apology came after the ITD filed a complaint with police against Customs Department spokesman Chaiyut Khamkhun for defamation after he accused the ITD of exporting 330 tonnes of face masks worth 160 million baht in January and February when the items were in short supply.