23 May
2005
Kampuchea Tela belongs to the Hun Sen
family (1)
Cambodia’s largest gas distribution company Kampuchea
Tela Limited is controlled by members of Prime Minister Hun Sen’s
family. This appears in the company’s “Memorandum and Articles of
Association” provided by the Ministry of Commerce.
According to the
official document, the company’s starting capital as of 28 October 1999
amounts to 1 billion riels ($250,000) and is divided into 1,000 shares
with a nominal of 1 million riels ($250).
The main shareholders
are:
- Mrs. Bun Sam Heang (Hun Sen’s wife; ID card # 010001098): 220
shares (22% of the capital).
- Ms. Hun Mana (Hun Sen’s daughter; ID
card # 010007778): 100 shares (10 % of the capital).
- The other
shareholders (Chhun Aun, Tep Ngorn, Prak Chamroeun, Nguon Leng) seem to be
mainly straw men, as is the case for many CPP-affiliated companies
including Canadia Bank.
As previously explained (KI, 26 November 2004:
“IMF-suggested tax reform increases corruption and
poverty”), Kampuchea Tela is a tool for the ruling CPP [in
general and the Hun Sen family in particular] to levy private taxes on the
Cambodian people.
Development prospects for Hun Sen
Inc.
Besides being the actual major shareholder of Kampuchea
Tela and a number of other prominent companies, Mrs. Hun Sen is the
President of the Cambodian Red Cross (see KI, 6 November 2002: “Cambodia’s
bloody Red Cross”), whose most valuable assets in the form of properties
have been recently sold off without any transparency (see KI, 3 March
2004: “Lame duck authorities intensify plunder”).
Besides being a
shareholder of Kampuchea Tela, Ms. Hun Mana is the Director of the
CPP-affiliated Bayon radio and television network and was the
President of the short-lived First Cambodia Airlines, which
unsuccessfully tried to make capital out of the Prime Minister’s
controversial “Open Sky Policy”. According to today’s Cambodia
Daily (“PM’s Daughter Gets Post”), she was appointed this month to the
Board of the National Polytechnic Institute of Cambodia because,
according to a government official, “Hun Mana’s company has a relationship
with companies in South Korea.” (?)
RELATED NEWS
PUBLISHED IN THE PAST
26 November
2004
IMF-suggested tax reform
increases corruption and poverty (2)
On the advice of the
International Monetary Fund the Cambodian government has dramatically
increased taxes on gasoline over the last few years. As a result, the
retail price of gasoline is now approximately 50 percent higher in
Cambodia ($0.75 per litre) than in neighboring countries ($0.50 per
litre), which has led to a spectacular boom in illegal import (smuggling)
from Thailand and Vietnam.
According to a report recently released by
the U.S. Agency for International Development (KI, 04 November 2004:
“USAID document says corruption costs the State between $300 and $500
million a year”), “legal import of petroleum has not increased over the
past 10 years, while the number of vehicles has increased fivefold. Just
for this one product, a large smuggling industry must necessarily be in
place, providing significant payments into the illicit system.” (Cambodian
Corruption Assessment, page 3).
The above case is an example of a
well-intended measure as suggested by the IMF (to increase tax revenue for
the state), but the measure was ill-conceived because it did not take into
account the legal and political context (no rule of law, systemic
corruption taking advantage of porous borders).
The Cambodian
government has been enthusiastic about the IMF's suggestion since the very
beginning, knowing its corrupt officials would be able to pervert the tax
increase and to divert revenue from the state coffers.
Only
foreign-owned petroleum companies (Caltex, Shell, Total), which account
for less than one fifth of Cambodia’s import of gasoline, pay taxes as
required by the law. At the current level of gasoline retail price, they
are hardly breaking even. Their Cambodian competitors (Kampuchea Tela,
Sokimex), which are owned by pro-CPP businessmen or government officials
and/or their relatives, do not pay any tax at all, while selling gasoline
at the same retail price as their foreign competitors.
Because of the
“illicit system” – as the USAID report puts it – the loss of revenue for
the state amounts to nearly $90 million a year (*), which represents in
fact a private tax levied by some top CPP officials and their business
cronies on the public. Corruption definitely increases poverty.
See
USAID report at http://www.cambodiapolitics.org/cambodian_corruption_assessment.pdf
(*) According to the Economic
Institute of Cambodia ("Cambodia Economic Watch", October
2004), taxes effectively collected on petroleum products represented $69.7
million in 2003, of which $22.4 million from gasoline. The loss of revenue
due to gasoline smuggling is four times that amount, i.e. $89.6
million.
3 March 2004
Lame duck authorities intensify plunder (2)
Over the past few
months there has been an intensification of plunder of natural resources
and State-owned assets by officials of the caretaker government, which
operates without the control of elected representatives of the people (no
functioning National assembly).
Deforestation has reached an
unprecedented scale in a situation of total anarchy (there are reports
about massive illegal logging every day in Khmer-language
newspapers).
More and more State assets are being illegally sold off
(KI, 25 January 2004: “Lame duck government selling off State assets”).
Latest examples of prime location State-owned properties that have
been disposed of: Red Cross compound (Phnom Penh, Norodom Boulevard), Army
High Command Headquarters (Phnom Penh, Norodom Boulevard), Sihanoukville
Municipality Headquarters of the Military Police (O Chheu Teal Beach),
Siem Reap City Stadium (KI, 29 January: “Fraudulent sale of Siem Reap
Stadium”). The authorities are transferring without any transparency the
corresponding public facilities to remote and much cheaper locations.
Photos can be seen at www.cambodiapolitics.org
6 November
2002
Cambodia’s bloody Red
Cross (1)
Following
the launching of www.pisethpilika.org (KI, 3 November), which reminds the
public of the direct involvement of Prime Minister Hun Sen’s wife Bun Rany
in the assassination of actress Piseth Pilika in 1999, a group of Members
of Parliament from the Sam Rainsy Party yesterday wrote to Hun Sen to ask
him purportedly embarrassing questions including this one: “Is it decent
to have the Cambodian Red Cross presided over by Mrs. Bun Rany Hun Sen [in
her capacity as Cambodia’s First Lady] given the fact that the Red Cross
is supposed to save people, not to kill people?”
The corruption-ridden
Cambodian Red Cross suffered another scandal in 1997: some $450,000 from
generous donations disappeared without anybody being investigated.
