BANGKOK (BLOOMBERG) - Thailand's King Maha Vajiralongkorn issued a rare rebuke of former prime minister Thaksin Shinawatra about a week after an inconclusive national election, making it more likely that a pro-military party would form a government.

The monarch revoked royal decorations given to Thaksin because he fled Thailand after being sentenced to prison, which is "an extremely inappropriate behaviour", according to a statement posted on the Royal Gazette's website.

Thaksin hasn't set foot in the country since 2008 after being accused of corruption in a case he has called politically motivated.

Provisional results show the Thaksin-linked Pheu Thai party emerged with the most seats after the general election on March 24, which followed almost five years of military rule. He or his allies have won the most seats in every election held since 2001, only to be unseated from government by coups or the courts.

Pheu Thai says it has built an alliance of anti-junta parties that would have a majority in the lower house of Parliament. That claim is disputed by a pro-military party, Palang Pracharath, which says it will seek to form a coalition government after winning the most votes of any single party.

"It's a significant signal that one side is viewed as more favourable than the other," said associate professor Punchada Sirivunnabood at Mahidol University, who often writes about politics. "Everything points to a favourable outcome for the pro-military party and its allies. They'll be successful in forming a government, but it will be difficult for them to maintain its power and last a full term."

CORONATION CEREMONY

The shape of the next government may not emerge for many weeks, following a messy election dogged by opposition claims of rigging and incompetent administration. The authorities must certify official results by May 9, which comes a few days after King Vajiralongkorn's coronation ceremony.

The King, who serves as head of state and is traditionally considered above politics, has been vocal around the election. In February, he denied an attempt by a Thaksin-linked party to name Princess Ubolratana Rajakanya as its candidate for prime minister, saying it was highly inappropriate and violated the spirit of the Constitution. The courts disbanded the party soon afterward.

GOOD PEOPLE

Then on the eve of the vote, King Vajiralongkorn released a statement that, in effect, asked citizens to back good people to govern the nation. It came shortly after Thaksin was photographed with the princess at his daughter's wedding in Hong Kong.

After the vote, Thaksin wrote an op-ed in the New York Times calling the election "rigged" and warning that the junta "will find a way to stay in charge".

"They have no shame, and they want to be in power no matter what," he said.

A spokesman for Pheu Thai couldn't immediately be reached for comment. The party cancelled a planned rally in Bangkok featuring Ms Sudarat Keyuraphan, its candidate for prime minister, just a few hours after the King's statement was published.

In an unrelated statement on Sunday (March 31), Pheu Thai said the anti-junta coalition had twice as many votes as the pro-military camp, showing the country doesn't want the current junta chief and Prime Minister Prayut Chan-o-cha to stay in power.

SEMI-DIVINE

Thailand's royal family is officially treated as semi-divine, and the country has some of the world's toughest lese majeste laws. Offenders face as many as 15 years in prison for defaming, insulting or threatening the king, queen, heir apparent or regent.

Since taking the throne in 2016, King Vajiralongkorn has changed rules related to royal powers. He gained greater control of the Crown Property Bureau's billions of dollars in holdings, following a legal change in 2017 that transferred ownership of the assets to him. In the past, the bureau was described as managing and preserving crown property that was neither public property nor the private property of the monarch.

Just over a month after he ascended to the throne, the military-appointed legislature approved changes to an interim national Constitution following suggestions from the king's office. The most notable adjustment allowed King Vajiralongkorn to travel abroad without temporarily handing over power.

The current Constitution allows the military to appoint a 250-member Senate that will also get a vote for prime minister. The group will most likely back Mr Prayut, effectively tilting the playing field in favor of the armed forces.

The political flux is casting a cloud over South-east Asia's second-largest economy as investors and firms await clarity.

"One concern is how fast a new government is formed, as the private sector needs clear policies," Bank of Thailand Governor Veerathai Santiprabhob said at an economic seminar in Bangkok on Monday. "Thai economic fundamentals remain sound, especially tourism, as long as political conflict doesn't lead to big street protests."

If Mr Prayut takes power without a working majority in the Lower House, he would struggle to pass legislation and could be vulnerable to a no-confidence vote. That scenario could end up hurting the economy, according to Mr Paul Chambers, a lecturer at Naresuan University's College of Asean Community Studies.

"It's not looking good for either side," he said. "Investors don't want to be investing in a country that has a lot of risks."