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Asianface director reportedly involved in business fraud in Cambodia

Investors in an allegedly fraudulent scheme offered by the Asian Face company are increasingly concerned after the involvement of its operator in similar activities in his home country were revealed.

Currently in police custody in Laos over his Asian Face Company Ltd's alleged illegal capital raising and related activities, Cambodian businessman Mr Huot Sovann has also been reported to have been involved in a similar case in Cambodia that remains unresolved two years later.

Registered in Laos in June 2015 as a consultancy firm, the Asianface company instead illegally encouraged people to deposit their money in return for shares in the company, lured by promises of an extraordinarily high rate of monthly interest of some nine percent per month.

Depositors told the Vientiane Times that the company had ceased paying interest in September last year and had since failed to return the principal or interest earnings as promised.

Mr Huot has been in police custody since March 28 this year after clients stormed his company offices in Phontongchommany village, Chanthabouly district, Vientiane demanding to withdraw their capital.

They found the company office shuttered.

Mr Huot has been listed as an executive director of Asean Instrument Foundation (AIF) in Cambodia where he was reportedly involved in business fraud in that country.

The Khmer Times newspaper reported in February last year that AIF, the BN Investment Advisory Co. Ltd and the Investment Consultation Association (ICA), all advised people to invest and deposit their money in the Empire Big Capital Ltd. (EBC), a Hong Kong-based investment company promising high return of 10 percent interest per month.

Several hundred villagers gathered that month to demand the EBC compensate them after investing in the company without seeing any returns, it reported citing the protesting villagers as saying.

Mr Kep Vanna, a villager from Cambodia's Kampong Cham province told the newspaper that clients signed contracts for an 18-month period that promised returns of 10 percent each month.

At the beginning, the clients received monthly dividends, but they were no longer forthcoming after June 2015.

Mr Vanna said the companies owed him and his relatives about US$160,000 after they had been depositing with EBC since 2014, The Khmer Times reported.

The 400 protestors from provinces across Cambodia alleged that Mr Huot Sovann and Mr Chi Gousaly, executive of ICA, cheated them out of their money before disappearing.

Cambodia's Prime Minister Hun Sen announced in 2015 that these companies were cheating their clients, and called on them to compensate the affected people.

The country's Securities Exchange Commission of Cambodia has also announced that ICA, AIF and EBC have been illegally operating in Cambodia and collecting deposits.

About 40,000 people had deposited between US$60 million and US$70 million in the three companies, it reported.

One of the Cambodian victims who asked not to be named told the Vientiane Times via social media that the issue had still not been resolved despite the scandal being ongoing for about two years. He claimed that his family had likely lost a great deal of money.

Meanwhile, police in Laos confirmed that Mr Huot remains in custody while the investigation into the firm's operations, the likely whereabouts of any monies and collation of evidence for potential crimes remains ongoing.

“We have also impounded his passport in order to prevent him from leaving the country,” a police officer said.

The investigation is seeking to find out how many people are connected to the business and what assets are being held by Asianface Company. Ltd and its affiliates and what the deposited monies had been used for.

A representative of clients, Mr Kongkham Singmeuangkham, told the Vientiane Times yesterday that Lao depositors in Asianface are extremely anxious about the issue given that they have not been updated on the progress of the investigation.

They increasingly fear that their investment will be lost.

“A number of people [depositors] keep calling me every day asking about the progress.”

“They said they will come to the company office again in coming days,” he said.

More than 10,000 people had deposited more than US$12 million with the company, Mr Kongkham said, citing a report.

The issue has led state authorities to issue public statements in news media publications including Vientiane Times warning investors to remain vigilant about such investment schemes or risky unorthodox ventures that offer shares or complex ownership arrangements in return for high rates of interest on capital or other incentives.


By Souksakhone Vaenkeo
(Latest Update April 19, 2017)

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