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Logo of Phnom Penh Post newspaper Phnom Penh Post - Planning ministry accused in land scam

Planning ministry accused in land scam

planning.jpg
planning.jpg

A local NGO has petitioned the Ministry of Justice to overturn a Supreme Court ruling

handed down last November in a complex land case involving the Ministry of Planning

(MoP).

Minister of Finance Keat Chhon isnít talking.

The Cambodian National Research Organization (CNRO), which is representing the plaintiff,

alleged that MoP officials might have pocketed hundreds of thousands of dollars through

the sale of ministry property in 1998. It demanded that Minister of Finance, Keat

Chhon, account for the money.

Keat Chhon did not respond to CNRO requests to explain where the revenue went and

the Post was unable to contact him. The secretary of state at the finance ministry,

Ouk Rabun, said he could not say off-hand whether or not the money had been paid

to the state, but undertook to "look into the matter".

The dispute arose after construction of the planning ministry's National Institute

of Statistics (NIS) building was completed in September 1999.

The plaintiff, Eng Bunkheang of Lemaster SDN BHD Cambodia, said ministry officials

and two businessmen cut her company out of the complicated property deal after she

had finished building the NIS offices. That had left her $373,000 out of pocket.

"The Ministry of Planning deceived me, because it collaborated with businessman

Heng Tuy to sell the land which already belonged to me," she said. "The

sum of $500,000 should have been paid to the Ministry of Economy and Finance but

they did not pay it to the state. They just kept it and shared it."

Bunkheang's story began in April 1998 when her company agreed to pay one million

dollars in cash and kind to the planning ministry for four plots of land on Phnom

Penh's Monivong Boulevard.

She said that figure included a $100,000 'commission' to ministry officials. Under

the agreement, Lemaster paid a $100,000 deposit and agreed to construct the new NIS

premises.

Lemaster then decided to sell all four plots of land to businessman Bun Chan Kreussa

for $1.2 million. But after he paid a deposit, he apparently ran out of money and

then brought in a third party, Heng Tuy, to pay the bulk of the outstanding amount.

Subsequent months saw a series of payments from the two businessmen to Bunkheang,

which she then passed to the MoP as on-payments for the four plots of land. By the

time the NIS building was finished, said Bunkheang, she had paid at least $715,000

to the MoP, and constructed the NIS building.

That was when the problems started. When the final payments to her from the two businessmen

fell due, Tuy produced a $225,000 backdated bill of sale purportedly from the MoP

transferring one of the plots directly to his ownership - a letter that the MoP later

agreed was fake.

At the same time, Kreussa also refused to make the final payments to Lemaster. It

was then that Bunkheang launched legal proceedings to recover the outstanding $373,000

from the two men.

In June 2000 Phnom Penh Municipal Judge Sok Sethamony found against her and ordered

that she pay $20,000 compensation to Heng Tuy for defamation. The Supreme Court upheld

that decision last November.

But Bunkheang, who has since gone into hiding to avoid paying the fine, has vowed

to fight on.

MoP secretary of state, Ou Orhart, said he could not explain what had happened to

the money.

"I have nothing to say now. This story is already finished," he told the

Post on April 9. "I don't know where the money went."

However a source at the MoP said officials and private companies, including Lemaster,

had all been party to the plan to profit illegally from the deal.

The episode has highlighted the issue of sales of state-owned land. A leaked US Embassy

report obtained by the Post last year made it clear that corrupt land deals are a

major source of "off-budget" revenue for the government.

"The [Royal Government of Cambodia] owns an estimated 80 percent of Cambodia's

land, and the law requires that proceeds from sales of such land accrue to the budget,"

the report stated.

"However, in the vast majority of cases, government ministries circumvent this

rule by exchanging the land for contributions to other, often unspecified development

or construction projects.

"These transactions are illegal, unmonitored by the [Ministry of Economy and

Finance], and represent an enormous loss of revenue," the US Embassy report

concluded.

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