Busan had airport rights: Korean MP

[PHNOM PENH POST]

Buildings at Camko City in Phnom Penh

A South Korean lawmaker has reportedly claimed that a scandal-ridden savings bank with business interests in Cambodia attempted to sell off its concession to develop an airport in the Kingdom.

Officials in the Kingdom, however, were unable to confirm yesterday that the bank had held such a concession.

The Korea Times reported on Tuesday that South Korean lawmaker Ooh Che-chang had alleged that executives from Busan Savings Bank had attempted to sell off the bank’s assets and pocket the proceeds following the suspension of its business activities in February by South Korean regulators due to a liquidity crisis.

Among such assets, Ooh reportedly said, was the bank’s right to develop an airport in Cambodia.

“The bank tried to rush the sale of its airport development when the prosecution started its investigation,” Ooh was quoted as saying.

Following the suspension of Busan’s business activities in February, a government investigation revealed that bank executives and shareholders had used the institution’s deposits to give themselves loans to fund a variety of projects both inside and outside South Korea. Bank executives also stand accused of bribing government auditors to overlook financial irregularities.

Busan Savings Bank was an investor in Phnom Penh-based Camko Bank, and was also reportedly the primary financial backer of the US$2 billion Camko City real estate development in Phnom Penh.

An assistant to Mao Havannall, secretary of state at Cambodia’s Civil Aviation Authority, said yesterday that he had no information on Busan Savings Bank. The secretary himself could not be reached for comment.

Kang Young-shin, economic counsellor at the South Korean embassy in Phnom Penh, said it would be “inappropriate” to comment in view of the ongoing investigation of Busan and its holdings.

The proposed $1 billion Siem Reap Airport and satellite city announced last year is being developed by a joint venture whose main investors are South Korea’s Lees A&A Co Ltd and Camko Airport Co Ltd, though this latter firm is not connected with Busan, according to Nam Shik-kang, chairman of the Korean Chamber of Commerce in Cambodia.

The Korea Deposit Insurance Corporation, a government company that serves as a guarantor for depositors’ funds in South Korea, has reportedly taken control of Busan Savings Bank’s operations in preparation to sell it, and is seizing assets of bank shareholders and executives connected with the misappropriation of the institution’s funds.

Camko Bank president Kim In-hong, whose institution has made arrangements to provide loans for customers who purchase homes at Camko City, said last week that the KDIC would likely take over Busan’s shares in the real estate project and ensure that it continues.

The South Korean embassy’s Kang said yesterday, however, that it was too early to say what action the Korea Deposit Insurance Corporation may take regarding Camko City.

“As time goes on, they will decide for any specific project or country,” he said.