Thailand's military coup leader Army Chief Sondhi Boonyarataklin said the armed forces ousted Prime Minister Thaksin Shinawatra because his government was tainted with corruption and cronyism.

The military had to “take control and rectify this situation to enable the country to quickly return to normal and to restore solidarity among the people,” Sondhi said in a live television broadcast today that lasted just three minutes.

The Thai Political Reform Council said earlier today it is in control of the Southeast Asian nation of 65 million people and declared allegiance to King Bhumibol Adulyadej, according to statements read on state television. The country's revered king is the world's longest reigning monarch and marked his 60th year on the throne in June.

The coup took place as Thaksin, 57, was in New York preparing to address the United Nations General Assembly. Thaksin has faced mounting calls for his resignation since January, when his family sold a stake in its telecommunications business for $1,9-billion without paying taxes.

Thaksin has headed a caretaker government since he dissolved Parliament in February.

As the coup unfolded, Thaksin canceled his speech at the UN. He remains in his hotel in New York, a unidentified spokesman said. Thaksin intends to leave New York shortly, Virasakdi Futrakul, the Thai ambassador to the US said earlier. He didn't know Thaksin's destination.

“We have a message for the world. The prime minister has not given up power,” Julpas Kruesopon, a Thai Rak Thai Party member in New York, told Cabinet members at Thaksin's hotel. “The prime minister is not seeking asylum. The situation is calm in Bangkok. People are going back to work. Streets are quiet.”

Thai police on August 24 defused a bomb that they said was intended to kill Thaksin in a car abandoned near the premier's house. At least five military officials were arrested over the alleged plot. Officers denied involvement in the incident.

Sondhi, 59, gave his address flanked by the other military leaders, including Supreme Commander Ruangroj Mahasaranon, Royal Thai Navy Chief Sathiraphan Keyanont, and Royal Thai Air Force Chief Chalit Pukbhasuk and the country's police chief. His comments were broadcast on all Thai television stations.

Political gatherings of five or more people and the stockpiling of goods is banned, the leaders said in statements broadcast on Thai television.

Military leaders took the view that rule by the caretaker government “created extreme divisions in the Thai society as never seen before,” Sondhi said. The government “was widely tainted with corruption” and benefited cronies.

Sondhi accused Thaksin's government of going against the 78-year-old king. The reform council late yesterday pledged allegiance to the king and met with him at midnight to inform the monarch of its actions. Soldiers adorned machine guns and tanks with yellow ribbons, a symbolic color of the monarch.

“People should not be scared,” said Lieutenant Viruch, 48, a soldier from the Royal Guard First Division in Bangkok, who wouldn't give his second name. “We won't be here long. We come to make the country better and restore democracy. I am very happy because people here are friendly,” he said, waving a pink rose and a water bottle given to him by passersby.

The coup leaders broadcast that they have suspended the constitution and dissolved the Cabinet, Senate and the constitutional court. In most ministries, permanent secretaries will take over temporarily, they said.

The Thai baht dropped 1,2%, the most since May 15. Standard & Poor's warned it might lower Thailand's eighth-ranking BBB+ debt rating, reflecting “the possibility of sustained deterioration in Thailand's political situation.” The Thai military has engineered 17 coups in the past 60 years, the last time in 1991.

“Thailand has had coups for a long, long time so we're pretty used to it,” said Mechai Viravaidya, chairman of Lam Soon Thailand and a former Thai senator. “We believe that politics should return to normal fairly quickly because they (the coup's leaders) clearly stipulated that we need some good, solid, quick political reforms and then return to democracy.”

Coup leaders want to return “power to the people” and don't seek power for themselves, the military said earlier.

Thailand has had a caretaker government unable to enact new policies since Thaksin dissolved Parliament in February. He called for an April vote in an attempt to end street protests in Bangkok and silence critics. The snap election was boycotted by the country's three biggest opposition parties and later annulled by a court.

New elections were expected to be held in November. Thaksin had pledged to lead his Thai Rak Thai party through the vote and insisted he hadn't decided whether he would return as premier should his party win.

The Thai army has been trying to control insurgents in three mainly Muslim southern provinces fighting to establish an independent Islamic state. More than 1,200 civilians and government officials have been killed in attacks in the region since January 2004. About 90% of Thailand's population is Buddhist. Sondhi is a Muslim.

The political uncertainty has taken a toll on Thailand's $188-billion economy, the second-largest in Southeast Asia after Indonesia. The Asian Development Bank this month cut its forecast for Thailand's growth this year to 4,2% from 4,7 %, citing political turmoil.

“One positive thing is that the political situation will be better from now on so our business can move on without worrying about daily protests,” said Wichian Sri-ong, 43, a fruit vendor at a market near government house.

Thaksin was first elected premier in 2001 after founding Thai Rak Thai, or Thais Love Thais, and was returned with a record majority in February 2005. The self-described “CEO prime minister” won favor with Thailand's rural voters after declaring a moratorium on debt owed by many farmers and giving money to every village.