The Phnom Penh Municipal Court on Tuesday charged prominent businessman Kuy Vat, a board member of Cambodian Investors Corporation (CIC). The legal move was lauded by investors, who were victims of the CIC venture, but called for investigations and a resolution having lost millions of dollars invested.
Deputy prosecutor and spokesperson Chhay Hong confirmed via Telegram that Vat was charged for committing an offense under the Law on Negotiable Instruments and Payment Transactions, which carries a five-year jail sentence and maximum fine of a 10 million riel (about $2,500). He is being questioned by the investigating judge.
Interior Ministry’s Criminal Department director Ngeng Chuo confirmed his arrest on Saturday. He referred further questions to the director of the administration Office and spokesperson of the Criminal Department, who declined to be named.
The officer said he cannot release any information as Vat was being investigated by the Phnom Penh Municipal Court. “When it [case] is being processed, the details of the criminal case are secret, including the professional status of the individual,” he said.
According to online media Freshnews, Vat was arrested for issuing bad checks and other allegations of fraud.
Vat is alleged to be involved in a multi-million dollar scam linked to CIC. He was also group chairman of Zillennium Co Ltd and CEO of Park Cafe.
CIC board member Chin Phearum said he had not heard of Vat’s arrest and declined to comment as he was in a meeting.
In April, CamboJA News reported that CIC allegedly collected approximately $100 million from investors but failed to pay interests or allowed them to withdraw money.
On March 25, the Securities and Exchange Regulator of Cambodia (SERC), issued a statement that it had retrieved about 90% of CIC’s assets and ensured safeguards to legally protect them in the interests of legitimate investors.
SERC director-general Sou Socheat could not be reached for comment.
Among the victims was Mengly J. Quach Education Plc, who lost money when he invested in CIC. He said Vat’s arrest provided “comfort to the victims”, but that other stakeholders must also be legally responsible.
The arrest might be related to CIC because Vat has “many scandals”, apart from CIC, Mengly opined.
“We do not know yet, unless we see good results and solutions for the people,” he said. “But we have yet to agree to a solution, because there are more stakeholders who need to be held accountable.”
Another victim, who invested $100,000 in CIC, lauded Vat’s arrest but called on the government to audit CIC and investigate other perpetrators.
“All those involved must be investigated, including the CEO of CIC. I request an internal audit to find out who took the money,” said the victim, who declined to be named. He added that CIC called him for meetings to find a solution but none was reached.
Economic researcher Hong Vannak at Royal Academy of Cambodia supported the legal action against Vat to protect the victims’ interests but a significant sum should be compensated.
Vannak said the impact did not only affect local businesses but also internationally if Vat had joined ventures with foreign partners.
The impact also does not impact Cambodians alone because foreign investors would have read the news, thereby impacting future investment.
“So [we] are affected in many ways but can’t estimate the level of impact,” Vannak said. He believed that the offense might not have only been committed by Vat alone as “some big businesses are systematic”.
More investigation should be done to ascertain others who were also involved. To be a good role model, action must be taken against investors who break the law, Vannak said, adding that it was good that an “elite” businessman was arrested for allegedly committing an offense.
“They should also investigate other properties he owned as well as his investments, and liquidate his assets to compensate victims,” Vannak said.
CIC directors Khim Sok Heng and Soum Sambath could not be reached for comment.
