DHAKA, Sept 18 (Reuters) - A Bangladesh court on Tuesday acquitted former army ruler Hossain Mohammad Ershad in a 16-year-old gold smuggling case, citing lack of evidence, lawyers and court officials said.

Ershad, separately, stands convicted for squandering state funds in a deal to purchase patrol boats from Japan while he was in power from 1982 to 1990.

He was given a two-year sentence but the court ruled that he did not need to serve it since he had already been imprisoned for more than five years for other graft cases.

Ershad was accused of gold smuggling after nearly 3,000 grams of gold were seized from two passengers arriving at Dhaka international airport in 1990 just before he was ousted from power.

But a Dhaka court on Tuesday said there was no evidence against the former military ruler.

"The former president has been acquitted as none of the eight listed witnesses produced any evidence before the court," Ershad's lawyer Sheikh Serajul Islam told reporters.

"Thanks to Allah, this time I have got justice," Ershad told reporters after the verdict.

Ershad seized power in a bloodless coup in 1982 and ruled the country until late 1990 when he was toppled in a popular upsurge.

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