[PHNOM PENH POST]
A south Korean government company may take over shares in the Camko City
development following the unraveling of a savings bank that has
invested in the project, Camko Bank president Kim In-hong said
yesterday.
South Korea’s Joong Ang Daily reported this week that
prosecutors in the country had claimed that Busan Savings Bank, which
faces a wide-ranging corruption investigation that has ensnared its top
executives, had set up a series of companies to fund the Camko City
project, pouring in US$459 million so far through nine different shell
companies.
Located in the capital’s Russei Keo district, the $2
billion Camko City development is set to include homes, shopping areas
and the Kingdom’s coming stock exchange, and is slated for completion by
2018.
Construction on the project, one of the largest foreign
investments in the Kingdom to date, has been stalled since last October,
however.
With the South Korean government having frozen Busan
Savings Bank’s operations and the arrest of a number of major
shareholders, the continued financing of Camko City has been called into
question.
Camko Bank’s Kim said yesterday, however, that he did
not believe this would be a problem because the Korea Deposit Insurance
Corporation, which acts as a guarantor for depositors’ funds in South
Korea, would step in.
“The government company will take over
Busan’s shares, and it will be expected to keep going,” Kim said, adding
that the effect of the lost investment from Busan would also be
cushioned by other investors in the project.
South Korean embassy officials declined to comment yesterday.
Nam
Shik-kang, chairman of the Korean Chamber of Commerce in Cambodia, said
that given the scale of the project, and of Busan’s investment, it
would be difficult for a private institution to fill in the gap.
“Other small shareholders cannot make up for the loss,” he said, recommending that the South Korean government step in.
Sung
Bonna, president of the National Valuers Association of Cambodia, said a
prolonged construction slowdown at Camko City could lead to further
concerns from potential customers about the already-stalled project.
“It will affect the developer, and especially the confidence of the buyer, the trust … for the buyer to invest in it,” he said.
Camko
Bank itself, Kim said, is “not involved" in any projects with Busan
Savings Bank, though Camko Bank has made arrangements to provide
consumer loans for customers who purchase homes at Camko City.
Busan
is listed as an investor in Camko Bank on the Camko Bank website,
though Kim said Busan held just a 19 percent stake, and that the
problems it is facing would not affect his own institution.
“We
are not involved with any projects which Busan Savings Bank initiated,
and we don’t have any risk at the moment,” he said. “Busan Savings
actually has no power to control Camko Bank.”
National Bank of
Cambodia director general and spokeswoman Nguon Sokha said yesterday
that NBC officials were investigating the case but had yet to discover
any irregularities regarding Busan’s involvement in the local banking
sector.
“Our people are aware of the issues and they’re working on that,” she said.
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