Around 100 families from Kandal, Kampong Chhnang and Kampong Cham provinces filed complaints to the Phnom Penh municipal court on Wednesday against tycoon Hy Kimhong, who was arrested earlier this week in an alleged land fraud scheme.
Hy Kimhong, president of the real estate firm Piphup Deimeas, faces charges of aggravated fraud, incitement against public officials and money laundering, according to a National Police report posted on Wednesday. Thirteen of Kimhong’s bodyguards were also arrested on Monday for allegedly violently obstructing Kimhong’s arrest.
Phnom Penh Municipal Court spokesperson Plang Sophal told CamboJA on Wednesday that the prosecutor is still questioning the suspects and could not confirm the charges Kimhong faced. He declined to comment further.
Around 790 families from Kampot province have filed complaints against Kimhong’s company which received more than $10.9 million from the province’s residents, Kampot Provincial Police Chief Mao Chanmathurith told CamboJA.
Piphup Deimeas Company, which did not respond to CamboJA’s requests for comment, claims in a June 26 statement posted on Facebook that although the dividend payments were late, the company had not been deceiving investors and was “preparing to pay dividends.”
Kimhong told his company’s investors via a video posted on Facebook on August 7 that the company will pay each of them $150 and then on August 17 will provide an additional $450.
Complainants told CamboJA they would refuse this offer because they would not be able to repay their loans.
Victims who traveled to Phnom Penh to file complaints this week and spoke with CamboJA were vague about how exactly the company had told them their investment into land in Kampong Speu province would generate monthly profits, but some said that they did in fact receive returns until several months ago.
Sieng Sinath, a 40-year-old resident of Kampong Cham province, said she had traveled from her hometown to file a lawsuit against the Piphup Deimeas for defrauding her of $ 20,000 over the purchase of a plot of land, earning $450 per month in interest.
Sinath said that she did not have money to invest, but after Piphup Deimeas staff convinced her to invest, she borrowed $ 20,000 from the bank, expecting a monthly profit would help her family have a better livelihood.
“In my village, there is a marketing manager who comes down to persuade people to invest with the company, claiming that they will have a better life after investing,” Sinath said. “I am a farmer and I do not have money, so I mortgaged my house and farmland with Sathapana Bank for $20,000.”
Sinath, echoing similar stories by other complainants, said the broker had urged her to buy land the company said was located on National Road 52 in Kampong Speu province.
Sinath and four others filing complaints told CamboJA that the company has told people that the investment in land acquisition has promised to return 3% or 4% on investment every month and for 2 years after the end of the contract, the company will buy the land at the original price.
Sinath claims that she decided to invest because she thought she would have a better life, but after the company suspended her monthly interest payments in April, her life became more difficult and her small business selling corns and cakes was not enough to make the repayments, and her husband’s job as a construction worker didn’t provide enough regular income.
She plans to have her 17-year-old daughter drop out of school to help pay off bank debt, because she fears the bank will seize her house and farmland pledged to the bank.
“Life is very difficult these days. I want my daughter to drop out of school to earn money to pay off our bank debt that we need to pay $ 700 a month. Last month I sold a motorbike to pay interest. Now I am exhausted and I have no strength. I can’t earn much money, ” Sinath said.
After not paying interest back to the bank for two months, Sinath is worried that the bank will not give her time to make money because when she borrowed she told the bank that she borrowed money to do business. What Sinath wants is for the relevant authorities to help the people get their money back and the bank should delay the payment of interest.
“I just want the money back to pay the bank, otherwise the bank will confiscate my house,” she said. “I have struggled with sleeping because the bank came to ask for money every day, but what if I cheated them.”
Sathapana Bank had not responded to a request for comment at the time of publication. Raymond Sia, the chairman of the Association of Banks in Cambodia, of which Sathapana is a member institution, said he was busy when contacted Wednesday evening and would respond to CamboJA’s questions later.
Asked by CamboJA about the alleged overindebtedness of Piphup Deimeas investors, Cambodia Microfinance Association (CMA) spokesperson Kaing Tongngy said that the microfinance sector has a responsibility to help its customers when they have a problem by examining solutions to their crisis.
“The issue needs to be discussed honestly by both the parties, the bank and the people, in order to find an appropriate solution and alleviate the burden of the affected citizens.” Tongngy said.
The scam’s alleged perpetrator, Kimhong, is listed as the director of AMZ Microfinance Institution, a member of the CMA.
The loans continue to affect residents like farmer Thol Kheun, 41, a resident of Taprom village in Kandal, who said she and another three siblings borrowed money from the bank in April,2023 to buy the land brokered by the company. She and her siblings grew concerned when she did not receive monthly payment in April this year.
Kheun, a mother of six whose husband works in construction, said she decided to buy the land using a loan from Amret microfinance institution because she saw her neighbors receiving a monthly profit which improved their lives.
“At first I didn’t dare to believe but the marketing person always came to persuade me saying investment with the company will give me a better life. I took my residential land title with [Amret] to get $17,000 for the investment.”
Kheun said she got $510 as her monthly profit and paid $450 to Amret in interest.
She regretted that she was cheated by the company and now became sick because she couldn’t afford to pay the debt. Kheun said after she couldn’t pay the microfinance interest, the Amret staff asked her to sell her land to pay the microfinance debt.
“I will sell my residential land [300 square meters] because I don’t have money to pay back the bank, so what I beg is give my money back, I don’t even need the interest anymore,” said Kheun.
On Wednesday, as its president appeared in court, Piphup Deimeas posted on its Facebook page that staff would be off for three days.
But the company appears to have continued other ventures. A June 16 Facebook post refers to another unspecified project and implores prospective investors to come on board: “We will provide 100% trust and confidence to our customers.”
(Additional reporting by Runn Sreydeth)