A Cambodian-owned real estate firm operating in the Lao capital Vientiane has halted payments to its investors, defrauding them of an estimated $10 million, sources say.
On March 27, angry clients gathered at Asian Face, a firm belonging to Cambodian businessman Huot Sovann, to demand their money back, prompting the owner to offer them properties in lieu of cash.
Asian Face had operated in Vientiane’s Chantaboury district since 2015 and stopped payments in September last year, one investor told RFA’s Lao Service.
“After not being paid returns on their investments since September, the company’s clients decided to withdraw their money and close their accounts, RFA’s source said, speaking on condition of anonymity.
“But the company refused to give them their money, and tried to delay payment by scheduling new appointments for pay-outs on March 27.”
Over 300 clients came to the company on that date, but no staff were there to talk to them, he said.
Following investors’ complaints, police in Vientiane’s Chanthaboury district seized Huot Sovann’s passport and took him into custody, the source said.
Interest rates on offer at Asian Face had ranged from eight to 30 percent of the value of individual deposits per month, the source said, adding that the company had paid these out through August 2016 and gave no explanation for its sudden inability to continue distributions.
Speaking to RFA on March 29, a Chanthaboury district police officer said that his office had released no reports on the case so far.
“The investigation has not been completed, and we are still collecting information.”
“If the company and its clients cannot resolve this situation, the case will be referred to the Ministry of Industry and Commerce for handling,” he said.
Confronted by clients at the police station, Huot Sovann offered an alternative solution to their difficulties, another source told RFA.
“He suggested that he would provide them with land and other properties in Vientiane’s suburbs instead of cash,” he said.
On March 30, Laos’s central bank issued a public warning urging citizens to carefully investigate the legal status of firms inviting investments and deposits from the public.
“If you believe these firms are raising funds illegally, please inform the relevant officials of the Bank of the Lao PDR [People’s Democratic Republic],” the notice warns.
Reported by RFA’s Lao Service. Translated by Ounkeo Souksavanh. Written in English by Richard Finney.