The court has decided to release Piphup Deimeas Company owner Hy Kimhong on bail although the case has yet to be resolved. Amid this, thousands of families who invested in his business are facing serious debt issues and seek a resolution.
Khun Leang Meng, spokesperson for the Court of Appeal in Phnom Penh, said the tycoon was released upon the request of the people.
“It is a temporary release [after] more than a thousand plaintiffs [families] called for his release to find a solution to transfer ownership and pay interests,” he mentioned.
Leang Meng could not confirm if the trial would resume and was unable to provide further answers. “I do not have a timeline for the resumption of the trial. I will wait for the trial court to close,” he added.
One of the victims, Ear Ly, who lives in Kampot province said he does not expect Kimhong to return his money even though he is out on bail.
The tycoon had previously promised to pay a three-months interest to his customers but it has been deferred to January 2024.
“I don’t really believe him … maybe 50 percent, because he still has his property and land. Perhaps he will sell those properties and pay us back,” the 37-year-old banana and durian farmer said.
In the meantime, Ly is straddled with the bank loan and struggles without a regular income. The loan interest rate is higher than his income which has compelled him to sell his motorcycle and cows, and has borrowed money from his relatives.
“For me, the bank debt is too heavy. Up to now, I have not seen any authority coming up with a solution for thousands of victims [of the scheme]. The debt has caused several families [couples] to divorce and their children dropping out of school,” he lamented.
Ly said while Kimhong was in prison, the latter’s wife met with the victims and persuaded them to retract their lawsuit so that her husband could be released on bail.
Another resident, 61-year-old Tom Tan, who lives in Kampong Chhnang province, said he met the tycoon after his release, and was promised that he (Kimhong) would pay two percent interest to his customers by January 2024. Although Tan is doubtful, he still hopes that the tycoon will make good his promise.
“I just met the tycoon and he said he couldn’t pay the interest from April till December, but those whose contract expired will get their money in January. He promised to pay all the victims,” said Tan.
In September, Cambodia Microfinance Association spokesman Kaing Tongngy, shared his concern for the victims of Piphup Deimeas development, clarifying that the loans from microfinance institutions were not purposely approved for investors in dishonest businesses.
However, the authorities have a responsibility in handling the issue and that the debtors remain in debt to creditors.
When Kimhong was interviewed by Sam Vicheka, director of the Office of Education at the National Police Department in Phnom Penh in August, he claimed that he was able to pay interests to his customers for “at least three months”. He also stated that his business was “legitimate” and has been operating since 2018, asserting that it was “not involved in scams”.
“In fact, the word fraud is not correct. If we say [the customer] receives their interest late, it is more accurate,” Kimhong said then. He added that the “customers” invested through the purchase of land, and earned a monthly interest. “Ninety percent of the customers took loans from banks for land investment.”
Phone calls made by CamboJA to Piphup Deimeas Company for comment were not answered.
On August 11, Phnom Penh Municipal Court Investigating Judge issued a temporary detention order for Kimhong, board chairman for Piphup Deimeas, and five other accomplices at the Police Judiciaire prison as formal investigations were completed by the Prosecutor’s Office. Eight security guards were released on the grounds that they were not involved in any crime.
In the same land investment case, Chea Saran was arrested in April following a lawsuit filed against him and his colleagues by some 2,000 families. He was charged with aggravated fraud and sent to Kampot Provincial Prison on April 27.
Am Sam Ath, operation director of rights group Licadho said the Appeals Court made the decision to release Kimhong based on judicial rights, but this decision might see victims lacking confidence in the judicial system as their issue remained unresolved.
“This [case] should be addressed [soon]. If it continues for a long time, it can make people unhappy and dissatisfied. It might affect their lives, making it difficult for them to deal with it.
“I understand that it is a matter of debt between private companies and the people. Nevertheless, when it’s a microfinance or bank debt and people can’t afford to pay, the authorities and the government should make a compromise as soon as possible,” he said.
Licadho has previously released a report where 6.1 percent of indebted people sold their land to repay debts. It also raised issues of child labor and children dropping out of school to help pay off debt, as well as starvation and forced migration.
