Govt seeks to regulate enterprises unlawfully raising capital
Proper investigation has been ordered into enterprises whose operations violate regulations and laws, notably those raising funds illegally from individuals for business operations, the government spokesman has said.
The instruction was made at the government monthly meeting for March, which took place last week in Vientiane when the cabinet discussed measures to regulate businesses.
More than 20 companies have encouraged individual members of the public to join business ventures, spokesman Prof. Dr Chaleun Yiapaoher said, citing a report from the Central Bank presented to the National Assembly.
The enterprises in question included PS Lao Enterprise, which previously campaigned unlawfully to persuade individuals to become business partners by contributing funds to its operations. The company stopped trying to raise money last year after the government stepped in.
“There must be investigations into not only PS Lao Enterprise but also other companies if their methods of fundraising and capital mobilisation are unlawful,” he told Vientiane Times last week.
Those found violating the regulations and laws must be ordered to comply or cease their operations, he added.
The violation committed by PS Lao Enterprise emerged some time ago but a solution remains elusive.
Established in 2012, the enterprise was registered and licensed as a limited company, which means financing must come solely from the operator, but the company was later found to be sourcing capital from individuals, officials explained previously.
It offered a monthly dividend of 6 percent on money invested, which led more than 50,000 people to contribute what is believed to be a huge amount of money. Public contributions to the partnership started at a minimum of 500,000 kip with the largest by an individual reportedly one billion kip.
Such an incredibly high dividend triggered concerns that the company, which produces a numbe r of products including drinking water and vegetables, would struggle to survive and repay its partners.
One of the enterprise's business partners told Vientiane Times yesterday she received her monthly dividend regularly. However, the monthly dividend was cut some time ago from 6 percent to just over 4 percent. The enterprise's ma nagement could not be reached for comment.
Dr Chaleun admitted there were concerns regarding the unsecured guarantee over funds contributed by the public to PS Lao Enterprise.
He said that while the enterprise had produced legitimate products such as drinking water and vegetables, its operation needed to be in line with the regulations and laws.
By Souksakhone Vaenkeo
(Latest Update March 22, 2017)