PS Lao to return money to partners over business uncertainty
PS Lao Enterprise has announced it is pleased to return money invested by business partners who want to withdraw their funds following legal uncertainty relating to the company's business.
The announcement comes after officials said the company's operations were in violation of the law and needed to be addressed.
President of PS Lao Enterprise Ms Souknaly Thepsimeaung said the business had offered customers two choices on how to access their capital, the Socio-Economic newspaper reported on Friday.
The first choice requires business partners to inform the company officially of their intention to withdraw the money.
The withdrawal can be made three months later allowing the company, which produces and sells various kinds of products, time to sell goods and return the money.
The second choice encourages business partners to market the company's products themselves in accordance with the amount they invested, according to the Socio-Economic newspaper.
Ms Souknaly promised that the company has the stock available for everyone to access and sell to recover their capital.
The company produces food items including meat, fish, rice and drinking water.
It also imports various grocery and consumer durable products for sale in Laos.
The company boasts 500 sales distributors across the country according to its own figures.
It was established in 2012 as the PS-Agriculture and Industry Development Import-Export Co., Ltd.
Ms Souknaly's comment comes as uncertainty about the company's future swirls after state authorities warned the company to stop unlawfully sourcing investment from the public to finance its operations.
The affair has served to undermine confidence, with some of those who put their savings into the company in hopes of a high return now seeking a way out.
As a limited private company, officials told Vientiane Times that sourcing capital to operate a business is the responsibility of the investor.
The company was found to be campaigning and mobilising money from members of the public motivated by a promised high return of a monthly 6 percent dividend.
But the high-risk, high-return strategy contravenes Lao law.
High profile cases have triggered concern that those taking part in business ventures run a high risk of losing their money with serious consequences.
Although the company stopped accepting new business partners some time ago following the warning by state authorities, there are more than 25,000 partners in the venture. Though the total capital contributed to the venture was not reported, it is believed that a significant amount of money has been accumulated by the company.
Ms Souknaly could not be reached for comment in response to enquiries by Vientiane Times .
One of the enterprise's business partners told Vientiane Times recently that she received a monthly dividend regularly.
However, the monthly dividend was cut some time ago from 6 percent to just over 4 percent per month.
It was reported previously that public contributions to the partnership started at a minimum of 500,000 kip.
The largest amount contributed by an individual was reportedly one billion kip.
Subscribers to the venture were required to stay with the business for at least one year after which they could withdraw their share.
People who have contributed a larger amount were required to remain in the scheme for longer.
There is growing concern that people who enter into business with companies that source money from people illegally in order to operate their business could lose their investment following a scandal involving the Asianface Company Ltd. which allegedly mobilised funds illegally.
The owner of the Asianface Company Ltd. was taken into police custody last week after failing to pay monthly dividends and return money to people as per its stated commitments.
Shortly after the case of the Asianface Company Ltd. emerged, the Bank of the Lao PDR issued a warning asking the public to be on the alert about such issues.
The bank advised people to deposit money solely with entities that are authorised and licensed legally by the central bank.
Officials reminded investors that only the five public companies listed on the Lao Securities Exchange were eligible to mobilise funds from the public and to sell shares.
These companies are the EDL Generation Public Company, Banque pour le Commerce Exterieur Lao Public, Lao World Public Company, Petroleum Trading Lao Public Company, and Souvanny Home Center Public Company.
By Souksakhone Vaenkeo
(Latest Update April 4, 2017)