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Thailand's government threatened legal action on Monday against a banned opposition party which claimed Prime Minister Prayut Chan-O-Cha aided in the cover-up of Malaysia's 1MDB graft scandal by harbouring a fugitive financier.

The stridently anti-military Future Forward Party, the third largest in parliament, was dissolved Friday by a court and its key members banned from politics for a decade.

On Sunday Future Forward's spokeswoman Pannika Wanich held a public conference and accused Prayut of allowing fugitive financier Low Taek Jho - commonly known as Jho Low - and his associates to pass through Thailand.

Low is wanted by several governments for his alleged mastermind role in plundering billions of dollars from Malaysia's sovereign wealth fund 1MDB.

A Thai government spokeswoman hit back Monday at Pannika, saying her accusations were "not true".

"This accusation ... confuses the public," Narumon Pinyosinwat said on Twitter. "Concerned ministries are considering legal action and ... will hold a formal presser."

Walking to government house on Monday morning, ex-general-turned-premier Prayut appeared jovial when asked about Pannika's accusations.

"The ministries are investigating and if it's not true, they can sue," he told reporters. Since 2016, a "red notice" was issued by Interpol at Singapore's request to flag Low's travels.

Countries receiving flagged individuals would typically inform requesting governments about the fugitive's whereabouts, executing an extradition process. But Pannika claimed that Thailand's immigration records showed Low passing through the country five times from 2016 to 2018.

Copyright Agence France-Presse, 2020

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