Search

Search form

Logo of Phnom Penh Post newspaper Phnom Penh Post - Gov't audit shows Vietnam Rubber Group missing millions

Gov't audit shows Vietnam Rubber Group missing millions

A rubber plantation in a Vietnamese-owned concession in Kratie province
A rubber plantation in a Vietnamese-owned concession in Kratie province last year. Heng Chivoan

Gov't audit shows Vietnam Rubber Group missing millions

Contentious plantation giant Vietnam Rubber Group reportedly “lost” nearly $391 million of state funds over five years, including $22.75 million from a rubber plantation in Cambodia, an official investigation into the firm’s dealings has found, according to Vietnamese media.

Hanoi’s anti-corruption body, the General Inspectorate, last week concluded a years-long investigation into the state-run company, which reportedly owns more than 160,000 hectares of land concessions in Cambodia.

In what it called a “major violation”, the audit found that one of VRG’s subsidiaries, Phu Rieng Kratie Co, had lost nearly $23 million since it began cultivating its 6,400-hectare Snuol district plantation in 2007.

Leng Rithy, VRG’s representative in Cambodia, confirmed media reports of the audit, and said he was unsure why it had found such huge losses.

“We will finish planting 100,000 hectares this year and plan to begin harvesting in 2016,” he said. “We don’t have any problems, so our future looks fine.”

In 2011, VRG said it had invested $200 million in 100,000 hectares of plantations in Cambodia. Companies are legally allowed to own only 10,000 hectares in economic land concessions.

Vietnam is in the process of selling off shares in its state-owned companies, including VRG, which is planning to close or sell off 40 per cent of its subsidiaries as part of the scheme.

In February, Phu Rieng Kratie Co transferred 90 per cent of its shares to a Singapore-registered company called Kratie Plantations Holdings, owned by investor David Gardner.

Gardner, who could not be reached by phone or email yesterday, is listed as director of Asian and African investments for Global Forest Partners, a multibillion-dollar US-based investment fund which has received money from the World Bank’s International Finance Corporation to conduct climate change mitigation programs.

In November last year, Gardner became director of the board of another VRG subsidiary with a 10,000-hectare rubber plantation in the same district.

According to a Global Witness report released last year, VRG has 161,344 hectares of rubber plantations in the Kingdom.

“Global Witness is worried to hear about the investigations into VRG’s financial mismanagement, especially at a time when the company finally appears to be taking the land dispute problems associated with its operations in Cambodia and Laos seriously,” said Megan MacInnes, land campaign leader at Global Witness.

“The Phu Rieng - Kratie Company and Cambodian subsidiary of Dong Nai were both investigated by Global Witness [in 2012] ... so we very much hope both plantations can be covered in this review.”

RECOMMENDED STORIES

  • Breaking: PM says prominent human rights NGO ‘must close’

    Prime Minister Hun Sen has instructed the Interior Ministry to investigate the Cambodian Center for Human Rights (CCHR) and potentially close it “because they follow foreigners”, appearing to link the rights group to the opposition Cambodia National Rescue Party's purported “revolution”. The CNRP - the

  • Rainsy and Sokha ‘would already be dead’: PM

    Prime Minister Hun Sen on Sunday appeared to suggest he would have assassinated opposition leaders Sam Rainsy and Kem Sokha had he known they were promising to “organise a new government” in the aftermath of the disputed 2013 national elections. In a clip from his speech

  • Massive ceremony at Angkor Wat will show ‘Cambodia not in anarchy’: PM

    Government officials, thousands of monks and Prime Minister Hun Sen himself will hold a massive prayer ceremony at Angkor Wat in early December to highlight the Kingdom’s continuing “peace, independence and political stability”, a spectacle observers said was designed to disguise the deterioration of

  • PM tells workers CNRP is to blame for any sanctions

    In a speech to workers yesterday, Prime Minister Hun Sen pinned the blame for any damage inflicted on Cambodia’s garment industry by potential economic sanctions squarely on the opposition party. “You must remember clearly that if the purchase orders are reduced, it is all