UDPATE 1-Top Thai court hits Thaksin over Myanmar loans

(Adds stock market reaction, baht, edits)

By Chalathip Thirasoonthrakul

BANGKOK, July 30 (Reuters) - Thailand's Supreme Court agreed on Wednesday to hear a case against ousted Prime Minister Thaksin Shinawatra over allegations he arranged soft loans to Myanmar while in office to benefit his family's telecoms business.

The decision is the latest blow to Thaksin's bid to clear his name after a 2006 military coup in which he was removed on the pretext of "rampant corruption", as well as to the six-month coalition government widely seen as his puppet.

The stock market, which has fallen 22 percent since anti-government street protests started two months ago, lost 0.5 percent amid more worries about political stability at a time of stuttering growth and decade-high inflation.

The same court agreed on Monday to probe Thaksin's entire cabinet, including three ministers now serving in the current administration, for allegedly breaking anti-gambling laws in a push to launch a new state lottery in 2003.

In the Myanmar case, an army-appointed graft panel accused Thaksin of ordering a state bank in 2004 to increase the size of a loan to the military-ruled former Burma to buy telecoms equipment from a unit of Shin Corp, the telecoms conglomerate Thaksin built.

The deal caused the bank to lose 670 million baht ($20 million), the panel alleged. Thaksin has denied any wrongdoing, as he has in several other investigations launched against him.

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