Bogus Firms Prey on Rural Poor

Khmer Times
May Kunmakara

Over 80 percent of Cambodia’s population is rural-based with most households not having access to a broad range of financial services. KT/Chor Sokunthea

The government yesterday named three bogus companies that have taken deposits from ordinary Cambodians and later absconded, after promising them monthly returns in the form of high interest rate payments.

A joint statement released by the Securities Exchange Commission of Cambodia (SECC) and the Ministry of Interior named the three bogus companies as Empire Big Capital Limited (EBC), AEAN Instrument Foundation (AIF) and Investment Consultant Association (ICA).

The statement added that the three bogus companies also at various times purported to be financial institutions or local NGOs.

“The three bogus companies have taken deposits from ordinary Cambodians, especially in the provinces, and promised them at least a minimum of 10 percent monthly interest payment. After taking the deposits and paying the high interest rates for a few months, they closed shop and absconded,” added the statement.

The SECC and the Ministry of Interior advised people who had been cheated by the three bogus companies to immediately lodge police complaints so that further action can be taken by the Ministry of Justice.

An SECC source who did not want to be identified said the names of the three were not registered as companies and neither were they authorized as deposit-taking financial institutions.

Khiev Sopheak, spokesman for the Ministry of Interior told Khmer Times that this was not the first time that such an incident had happened in the country.

“It’s the poor people in the provinces that are gullible in such fraudulent schemes and it’s an ongoing headache for the ministry,” said Mr. Sopheak.

“I think these three bogus companies are run by individuals who are wanted by the authorities in other countries,” he added.

Mr. Sopheak advised the public, especially in the provinces, to be on the lookout for such tricksters.

“If anyone knows of any so-called NGOs or associations that take deposits for investments and promise high interest rate payments in return, please do inform us immediately. We will take the necessary action,” he added.

But Mr. Sopheak pointed out that taking fast action was not always easy and when police did intervene, it was often too late.

“The trouble is people often keep quiet and do things on the sly, hoping to get rich quick. It’s when they get into trouble that they come running to the authorities. By then, it’s often too late because the culprits have run away,” he said.

Over 80 percent of Cambodia’s population is rural-based with most households not having access to a broad range of financial services.

The Asian Development Bank noted in a recent review that the development of deposit services in the country has significantly lagged behind credit services. In the absence of appropriate formal savings services, Cambodia’s rural households rely on informal mechanisms for saving.