Update: The cover photo for this article was revised Dec. 27, 2024, to blur Bangkok Bank PCL’s logo at the firm’s request. The bank is not mentioned or implicated in the article and has no ties to Ly.
Feeling the pinch, companies linked to U.S.-sanctioned tycoon and ruling party senator Ly Yong Phat have disappeared from business registries, scrubbed their online presence, and shuttered physical locations.
Since Sept. 12, when the U.S. Treasury dropped the hammer with sanctions on the “King of Koh Kong” over his alleged involvement in human trafficking and cybercrimes, 13 businesses linked to Ly or his family – including the blacklisted L.Y.P. Group and Garden City Development – have disappeared from Cambodia’s official business registry. Digital and physical traces have also vanished, from the L.Y.P. Group website to the signage on its headquarters.
Viewed as a textbook case of going underground to dodge sanctions – and a preemptive move to avoid further crackdowns – Ly and his family’s business maneuvers highlight the complexities of U.S.-Cambodia relations and the power of the country’s elites, who are “in lockstep with the state-party apparatus,” according to a transnational crime expert.
“It’s hard to look at this recent move as anything other than outright sanctions evasion, to be perfectly honest” said Jacob Sims, a visiting expert on transnational crime at the U.S. Institute of Peace, referring to the unexplained vanishing of Ly’s sanctioned entities from public record.
While only the eponymous L.Y.P Group and Garden City Development are prohibited from doing business with U.S. entities, Ly’s other ventures – sugar plantations linked to land grabs and forced evictions, a hydropower firm accused of illegal logging, a high-speed rail company, and many other family-controlled businesses – have also slipped off the radar.
“The removal of these other businesses can be viewed as a sign that he sees the writing on the wall. This looks like a preemptive measure to protect those assets in case sanctions extend at some point,” said Sims, adding that much of Ly’s wealth is tied up in sugar, transportation companies, and energy utilities.
Ly, a dual Thai-Cambodian national and adviser to Hun Sen, amassed his fortune through cigarette imports and exports, electricity generation, and operating resorts and casinos.
The rest of the 66-year-old’s business portfolio is linked to his wife and five children, who dominate the companies’ boards.
His wife, Kim Heang, was listed as owner and chair of L.Y.P. Group until the conglomerate vanished from the Ministry of Commerce (MOC) database between September and December.
Kim also sits on the board of Steung Meteuk Hydropower, another family venture. Earlier this year, the firm reportedly logged illegally in the protected Phnom Samkos Wildlife Sanctuary for a $440 million hydropower project before disappearing from the MOC database after Ly’s sanctioning.
Ly’s flagship sugar company, Phnom Penh Sugar, exposed for seizing and bulldozing the farms and homes of over 1,100 families to clear land for a sprawling plantation and refinery, has also vanished from records. It was last listed with four of his five children on its board.
Sister firms Kampong Speu Plantation and Kampong Speu Sugar, also linked to the forced evictions in the province, were last registered under the chairmanship or ownership of Ly’s daughter, Ly Arporn, or Kim.
The newly deregistered Koh Kong Special Economic Zone, owned by L.Y.P. Group, is still listed on the Council for the Development of Cambodia (CDC) website.
The CDC secretary-general Hoeurn Samnieng declined to comment on the SEZ.
The zone hosts various Japanese and South Korean manufacturers, including Hyundai, which did not comment on the impact of U.S. sanctions on L.Y.P. Group or how it may affect their operations and compliance.
About 20 kilometers from L.Y.P Group’s headquarters is the Garden City Hotel, owned by the company. Its YouTube page was terminated for “violating terms of service.” Its Instagram account is also gone.
While the sanctions on Ly stemmed from documented online scams and forced labor at the L.Y.P. Group-owned O’Smach resort in Oddar Meanchey, advocacy for broader sanctions over other abuses lacked political traction. U.S. foreign policy strategy may have further limited any wider action, Sims speculated.
Yet, the deeper layer of Ly’s blacklisting and buried business registrations lies in state-backed cronyism that enables him, according to the transnational crime expert who is also the founding partner of Operation Shamrock, a global coalition targeting Southeast Asia’s organized cybercrime.
“Sanctioning bodies are not dealing here with a single rogue tycoon, but rather a powerful and integrated actor whose business interests are enmeshed and aligned with state interests, meaning this is someone we can expect the state will work to protect,” Sims said.
He pointed to the Cambodian government’s swift and unequivocal denunciation of the sanctions’ legitimacy as the initial evidence of this protection unfolding.
USIP’s May 2024 Report (of which Sims was a co-author) explores in-depth the widespread co-option of local elites and formal institutions into support of transnational criminal activity in Cambodia and in hotspots across the region.
While Sims believes U.S. sanctions can be an effective mechanism for accountability, he suggested the impacts will be limited given Ly’s influence over the government. The bigger blow will be the tarnishing of his role as a legitimate actor, which Cambodia uses to launder its reputation through international business partnerships.
CamboJA News made several unsuccessful attempts to reach Ly at the same number he had used previously.
An email to L.Y.P. Group’s formerly listed address bounced back, citing a non-existent domain.
MOC officials did not comment on the removal of companies from the business registration database or clarify if it can occur without official dissolution. However, spokesperson Penn Sovicheat said he was “researching information.”
The U.S. Treasury Department did not immediately respond to requests for comment on the concealment of business linked to Ly.
(Additional reporting by Khuon Narim)