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Friday, September 26, 2014

Gateway to Cambodia: The Mysterious Couple Who Bring Investments In To Cambodia

Megha Bahree Contributor

Lao Meng Khin and Yeay Phu routinely bring in foreign investment–mainly Chinese–to their Cambodian resource plays. Typically, one of their companies will do a joint venture in which the pair are the local face and make relevant introductions, and the Chinese partners put down a big chunk of cash.

Some projects have gone forward, often with local protests, and others are at an uncertain stage. That’s how Britain’s Global Witness group sees it. It says three of the Pheapimex “economic land concessions” are joint ventures with China’s Wuzhishan Group–which in turn has a capital source out of Hong Kong — a nd Kong Triv, another tycoon, who is a senator for the prime minister’s party. Skirmishes with locals at these sites go back at least ten years.

Lao Meng Khin with wife Yeay Phu. (credit: AP Photo/Heng Sinith)

Pheapimex has engaged in illegal logging, both inside and outside its concessions, with military complicity, according to Global Witness. (When these charges were first aired a decade ago, Hun Sen publicly attacked the report, telling journalists that “Global Witness has lied before, and today they are lying again.”)

Pheapimex has a range of interests beyond forests. These include salt iodization, over which the government granted it a monopoly, iron ore extraction, bamboo cultivation, pharmaceutical importation and hotel construction.

Another company Lao and Yeay set up, Cambodia International Investment Development Group (CIIDG), commenced a joint venture in 2010 with Chinese firm Jiangsu Taihu International for a 1,113-hectare special economic zone near Sihanoukville. It claimed that the two companies would spend $1 billion to develop the area. Under Cambodian law, companies developing SEZs are granted a nine-year tax holiday, as well as exemptions on VAT and import and export duties. Part of that SEZ is up and running with 15 companies operating there, according to its website.

One of the investor sin Jiangsu Taihu is Zhao Yaoting, No. 230 on the latest FORBES CHINA rich list, with an estimated $840 million.

CIIDG announced further ventures with the now troubled Chinese partner Erdos Hongjun to set up a coal plant and to mine for bauxite, as well as another coal plant with a Malaysian company.

Whatever the status of these and other projects, the Cambodian government, at least, is appreciative: In 2007 Hun Sen presented Yeay Phu with the Moha Sereiwath medal–a decoration reserved for individuals who’ve made a particularly generous contribution to Cambodia’s development.

(With inputs from Heng Shao.)

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