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Logo of Phnom Penh Post newspaper Phnom Penh Post - Credit Suisse’s HAGL holdings drawing fire

Credit Suisse’s HAGL holdings drawing fire

Credit Suisse, a financial services firm based in Switzerland, has been accused of aiding land grabbing in Cambodia by becoming a major shareholder in Vietnamese rubber giant Hoang Anh Gia Lai (HAGL) Group.

In a statement released today, Global Witness (GW), an NGO based in England, claims that Credit Suisse became a “major shareholder” in HAGL shortly after GW released a report in May outlining alleged human rights abuses at its rubber plantation projects in Ratanakkiri province.

“Credit Suisse became the largest institutional shareholder in [HAGL] … just two weeks after Global Witness exposed a range of environmental and human rights abuses in the company’s plantations in Cambodia and Laos,” the statement says. “Such action is in direct contravention of Credit Suisse’s commitments to human rights.”

But a spokesman for Credit Suisse said its links to HAGL predated GW’s report.

“Credit Suisse’s holding is for the purpose of hedging transactions it has entered in with its clients,” the spokesman wrote in an email. “Credit Suisse’s bond holding was first acquired in 2011, around 2 years before Global Witness made public its views on the company.”

GW, however, alleges that Credit Suisse swapped bonds it held in HAGL to acquire more than 10 per cent of the company’s shares, making it the second-largest investor behind founder and chairman Doan Nguyen Duc.

“What kind of checks can Credit Suisse have done if it thought this was a good time to provide finance to a company like HAGL?” GW’s Megan MacInnes says in the statement.

HAGL Group chief financial officer Vo Truong Son yesterday confirmed that Credit Suisse is a shareholder in the company.

“However, we are not sure whether their investment is made with their own capital or from their customers’ authorization,” he wrote in an email.

Son denied his company was committing any wrongdoing, saying that GW’s allegations are “totally fabricated, producing no convincing evidence at all”.

“HAGL have always done business in compliance with the law of the host country.”

After Global Witness singled out Deutsche Bank in its report in May, the Post reported early this month that the German bank had divested from HAGL. But Son said this did not appear to be the case.

“Based on Deutsche Bank’s report sent to the State Securities Commission of Vietnam on 6th and 10th [December], 2013, they have proceeded with buying HAGL stocks instead of capital withdrawal as trumped up by GW,” he wrote.

At the time of the Post’s story on Deutsche Bank, a spokesman from the company took pains to say that the “small shareholding [GW] referred to was through funds managed by a third party on behalf of external investors”.

According to GW, HAGL’s rubber projects have driven families off their land without compensation, destroying sacred forests in the process.

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