The Election Commission (EC) is drawing up a petition asking the Constitutional Court to disband the Future Forward Party (FFP) over a loan case and expects to submit it to the court shortly, an EC source said.
The source said on Thursday the process to submit the dissolution case against the FFP to the court will not take long.
FFP leader Thanathorn Juangroongruangkit previously admitted he gave a loan to his party, so now the only legal point which will have to be proved in court is whether the party was allowed to borrow for political activities.
The source cited Section 62 of the organic law on political parties which provides details about what income parties can legally make for their spending.
The section allows parties to conduct fundraisers or receive donations, but it does not include loans as a legitimate financial source.
Section 66 of the law also bars any individual from donating money or assets to parties in excess of 10 million baht within a one-year period.
On May 15, Mr Thanathorn told a forum at the Foreign Correspondents' Club of Thailand (FCCT) that he gave his party a loan to help finance the election campaign.
For the sake of transparency, Mr Thanathorn said he did not wish to give "free money" so he lent it to the party which was open about the issue and made it known how the money would be spent.
Mr Thanathorn declared assets of 5.6 billion baht and liabilities of 683,000 baht to the National Anti-Corruption Commission (NACC). The FFP was listed as one of his debtors, with credit lines totalling 191.2 million baht in two loan contracts.
Last Wednesday, the EC voted to ask the Constitutional Court to disband the FFP on the ground that the party borrowed the 191.2 million baht from Mr Thanathorn in violation of the organic law on parties.
The EC cited Section 72 of the law, which prohibits parties and its executives from accepting cash donations, assets or other benefits when they know, should know, or suspect the money comes from an illegitimate source.
The EC considers the loan "illegitimate", citing Sections 62 and 66 of the law, according to the EC sources.
If the court agrees with the EC, the party's 15 executives -- including Mr Thanathorn, who was disqualified as an MP by the same court in a media shareholding case last month, secretary-general Piyabutr Saengkanokkul and spokeswoman Pannika Wanich -- will be banned from politics and the party disbanded.
Somchai Srisutthiyakorn, a former election commissioner and now independent academic, posted on Facebook that Section 72 of the organic law on political parties is actually intended to prevent "dirty money" financing political parties, such as money from the sale of contraband or war weapons.
"Is the EC sure that it will use this section against Future Forward? Do you already know that the loan is dirty money?" Mr Somchai said.