The Chinese development firm set to change the face of Phnom Penh’s northern riverfront is under investigation over claims it attempted to sell off tens of millions of dollars’ worth of land it leased for the development – a potential breach of its contract, an official said.
The Yuetai Group, which leased more than nine hectares of land between the Chroy Changvar bridge and Night Market from the Phnom Penh Autonomous Port in 2018, has rejected the allegations, which came after a Facebook page in its name advertised plots of land in a post seen by CamboJA in September.
Phnom Penh Autonomous Port officials met with Yuetai in January to discuss the allegations, having previously warned the company against selling off any of the land leased for the $500-million “City Gate” development, Hey Bavy, director-general at the Port, told CamboJA.
“It is a breach of contract and if we found that the company violates the agreement, we could consider terminating the project,” he said.
“The company claims there is no reselling of land in this development. However, the port will continue to investigate.”
Lim Seing, a sales supervisor for Yuetai, said that there may have been some confusion related to the company’s plans to sublet parts of the land.
“The company used to have plans to put land up for reinvestment, looking for partners to build hotels, restaurants and a gym,” he said. “However, the company does not divide land into plots for sale as per the rumor.”
Another Yuetai representative told CamboJA that the company was not selling land inside the concession, and that the Facebook page which made the post did not belong to the company.
“The homepage is the broker homepage and the information is not accurate,” the representative said via a Facebook messenger account connected to a different Yuetai Facebook page, declining to give their name or position.
The development, also known as Phnom Penh Harbor Bay, is set to completely overhaul the northern stretch of the riverfront, with 50-storey condominiums, a five-star resort, water park, floating market and an exhibition center included in the plans.
The Cambodia Security Exchange-listed PPAP leased the land along the Tonle Sap for 50 years to Chinese real estate developer, Chean Chhoeng Thai Group, a subsidiary of Yuetai Group, for $16.5 million in 2018.
According to the Facebook post in question, which is from September 2020 and has now been deleted, the company was looking to sell plots of land sized between 104 and 169 square-meters.
CamboJA called a phone number listed on the page and arranged to meet a man claiming to be a salesman for Yuetai, who said in February that almost two hectares had been carved up for sale at between $3,300 and $4,000 per square meter, with the company to provide land titles within two years of purchase.
The total value of the alleged proposed sales would add up to tens of millions of dollars.
Contacted in March, the salesman said that the land is no longer for sale.
Hong Vannak, a business researcher at the Royal Academy of Cambodia, said that while the law did not allow Yuetai to sell land granted for the project, it could be sold to a third party under a sublease agreement from the state in the case that it was going bankrupt.
Claims of land sales should be closely monitored by authorities in order to mitigate future disputes, he said, with any buyers likely to lose their investment.
“It is like buying land under an illegal agreement, and then the state has the right to seize the property,” he said.
In connection with the City Gate development, Yuetai pledged to spend $30 million on infrastructure such as embankments, pavements and roads in the area.
It also pledged to build an $11 million office building and two multi-purpose terminals, worth $30 million, for the Phnom Penh Autonomous Port.
Pech Pisey, executive director of Transparency International Cambodia, said it’s important for the investment firm to comply with the agreement and that any amendments to the agreed terms and conditions must be discussed.
“The authority should properly monitor and effectively oversee the implementation of the agreement and ensure that all terms and conditions are properly followed,” he said.
At the project site, the Yuetai Group has built the framework for a set of three-story shop house blocks, which will be sold for between $150,000 and $1 million, and is currently laying the foundation for two blocks of condominiums, which will be offered for between $80,000 and $120,000.
In Cambodia, Yuetai Group projects include East One, East View and the East Commercial Center. The company is also developing Yuetai the Garden, a residential project set for completion this year.