“I am innocent, but I was convicted and sentenced to jail. It’s something I cannot accept. I would like to ask Prime Minister Hun Sen, his wife and the King for help. To make Cambodia a country of law and to prevent other people from being wrongly convicted, I would like to ask Samdech Hun Sen to re-examine the judicial system.” Rector Tep Kolap
“To find justice for myself and my wife, I will appeal to the Supreme Court. I will also take this to the Anti-Corruption Unit and the Ministry of Economy and Finance. I tell them all about Kok An’s companies’ activities – they have not been paying taxes to the state. He has used my personal account and my wife’s account [to accelerate] his illegal-earning business activities in Cambodia.” Heng Chheang
“The activities [of the couple] are unpardonable. If I do not sue them in court to find the truth … they must then really think that their lying and cheating are right, because no one dares to punish them.” Senator Kok An
“I try to run away from this unfortunate business (for me) that caused enough damage to me. As far as corruption system is still common practice, it is just waste of time and quite damaging for your reputation to try to propose regular and fair methodology to find justice for people. Never again would I accept to do this job in Cambodia, they are not ready to use my competence, I have learned a sour lesson from this case. They transform black into white, fair into unfair…” Auditor Kak Key
Read how the legal battle intensified as as the amount of 'stolen funds' surged
Behind the legal battle between Senator Kok An and the former rector of Phnom Penh International University and her husband lies a complex web of transactions, as well as allegations that the case was fabricated to grab the country’s fastest growing university.
The morning before the verdict was handed down at the Appeals Court on March 12, the mood among those working on the defence team for Heng Chheang and his wife Tep Kolap was almost optimistic.
Who is Kok An?
Kok An is a senator in the ruling Cambodian People’s Party as well as a tycoon whose businesses include casinos, water and electrical supply as well as a bank.
According to a September 9, 2007, cable from the US Embassy in Phnom Penh released by Wikileaks last year, he is one of the 10 richest tycoons in Cambodia.
“Kok An has strong ties to the ruling CPP and was reportedly one of the people who helped pay the US$50 million in compensation to Thailand for damage to the Thai Embassy during the anti-Thai riots in early 2003,” the cable reads.
“Cambodia’s tycoons are a close-knit and powerful group, who often share involvement in charitable activities like the Cambodian Red Cross and are further bound together by marriages and business partnerships … Another striking aspect of this network is the active involvement of the spouses of government and business officials who are significant shareholders in various businesses.
Hun Sen’s relationship to this group is both symbiotic and self-limiting.
The tycoons help to finance the CPP, contribute greatly to economic growth and undertake important charitable work such as the construction of schools and hospitals, while reaping the benefits of close government ties.
Hun Sen announced a “war on corruption” in 2004, which was aimed at legal, judicial, and public administration reform.
However, Hun Sen’s very reliance on his tycoon network may hinder progress in battling corruption, illegal logging, and other sensitive issues that he claims are priorities,” the cable concludes.
They, along with relatives of the couple and academics from Phnom Penh International University, were gathered in Tep Kolap’s office at the university, with most saying they had not been able to sleep the night before.
The consensus was that the former PPIU rector had a 50:50 chance of being released, though they thought it was unlikely her husband would be released that day due to a “confession” he had made on January 1, 2011, taking responsibility for the apparent loss of about US$630,000 from one of Senator tycoon Kok An’s companies: Anco Brothers.
“We find it impossible to imagine that the court would ignore bank statements that prove claims made against Tep Kolap and Heng Chheang were false,” Kong Bunthy, a law lecturer at the university, said.
“How can they be accused of embezzling when more money flowed back into the [Anco] account than flowed out?” asked Hen Sam Ath, senior vice-rector at the university and a friend of Tep Kolap since their time as students in Bangkok when she was studying international relations on a scholarship from that country’s king.
Kong Bunthy and Hen Sam Ath were referring to almost 10 years of financial transactions at Union Commercial Bank in which more than $100 million flowed back and forth between personal accounts, two of which were used by Anco Brothers, which distributes Evian water, British Tobacco products and Budweiser beer in Cambodia.
The company did not have a corporate account. Instead, it used at least two accounts registered in the names of the company’s director, Kok An’s wife Sok Im, and her cousin, Heng Chheang, who began working for Kok An in the early ’90s by overseeing a cigarette warehouse in Phnom Penh.
Heng Chheang described himself as the company’s treasurer, but Kok An’s lawyers referred to him as the company’s executive director. (The distinction is important because Heng Chheang has argued that as treasurer he was not in a decision-making process and that all transactions were approved by more senior executives.)
The prediction that Tep Kolap had a 50:50 chance of being freed was based on the evidence presented during the hearing on March 1 and 2, which included banking records showing more than $63 million flowing into the “Anco” accounts from a UCB account registered in Heng Cheang and Tep Kolap’s names. It was also based on statements made by the presiding judge about the audit used by Kok An’s lawyers, statements the defence lawyers interpreted to mean that the judge agreed it had been “one-sided”. The audit showed more than $58 million flowing into the Heng Chheng-Tep Kolap account from the Anco accounts, but did not show transfers returning from that account to the Anco accounts.
The defence also presented evidence showing funds being transferred from the Heng Chheang-Tep Kolap account to accounts overseas registered under the names of Sok Im and her son, as well as accounts in her sister’s name, Siv Buy.
Sok Im and Siv Buy are sisters who Kok An calls his wives. This evidence cast doubt on Sok Im’s statements to court appointed auditor Kak Key that she had no involvement in her company’s finances, as did scores of receipts showing her signature on cash disbursals from Anco Brothers. Copies of these receipts were provided to the Post.
Defence lawyers also said the hearing at the Appeals Court clearly exposed the circular argument the charges against Tep Kolap and Heng Chheang were based on: Kok An’s claim that the pair embezzled more than $58 million relied on an audit that was based on evidence provided by his lawyers.
“When asked how he knew $58 million was embezzled from his company, Kok An pointed to Kak Key’s audit, but when we asked [court-appointed auditor] Kak Key how he arrived at that figure, he pointed to evidence provided by Kok An’s lawyers,” law professor Bun Srong said.
Meeting Kok An
The Sunday morning before the verdict Kak Key arranged a meeting with Kok An to discuss an article that was printed in The Phnom Penh Post on March 9. The meeting began at 8am in a booth at a Chinese restaurant in front of Anco Group’s office on Street 217. Kak Key was extremely agitated, saying Kok An had threatened to sue him for defamation over statements he had made that were included in the March 9 article. He was also alarmed that a subsequent email sent to the Post would be made public, and had made a series of increasingly desperate phone calls on March 9 and 10 – as reports appeared in Khmer newspapers about the case using quotes from the Post article – pleading that the content of the email not be made public.
Kak Key also said he did not recall saying that Kok was “very determined not to let [Tep Kolap and Heng Chheang] out of prison”, as he had been quoted as saying in the Post article. In the email he requested to be kept private, however, he went much further, saying that when he met Kok An in August 2011, the senator had told him that he had attempted to negotiate a settlement with Heng Chheang and Tep Kolap. “If after [a] check and cross-check [of financial transactions] with all parties [is completed] and … the result is only less than 3 million dollars [missing], [Kok An] will withdraw [all charges]. If more than that [is missing] he will accept [a] reimbursement plan,” the auditor wrote.
“But things became sour afterwards; it seems that [Tep] Kolap told everybody that she will take revenge on Kok An during this life and three more lives to come. You can imagine the anger of Kok An. This kind of things means a lot for him and from that moment Kok An decided that Tep Kolap should stay in jail and [he] will refuse any solution through compromise,” he continued.
When Kok An arrived at the restaurant, he was polite, relaxed and engaging – initially. After breakfast, the meeting continued in his office, where he had said he would show evidence that Tep Kolap and Heng Chheang were guilty.
Instead, however, he instructed the Post to print a correction of Kak Key’s statement saying Kok An was determined to keep Tep Kolap and Heng Chheang in jail. He wanted the correction to be made in Kak Key’s name, and to say that it was made at the auditor’s request, not his. The revised statement Kok An wanted the Post to make in Kak Key’s name was: “If the Appeals Court does not overturn the decision of the Court of First Instance, I do not see how they can keep them [Tep Kolap and Heng Chheang] out of jail.” Kok An also said that the pre-arranged meeting was “unofficial” and instructed the Post not to report that it had happened. “You met only with Kak Key, not me,” he said, according to Kak Key’s translation.
Kok An declined to answer any questions about the case, saying he would hold a press conference after the verdict was announced. He aslo said that he had made a deal with an influential Khmer-daily that if the Post printed a correction it would retract an article it ran based, in part, on the March 9 report in the Post.
After the meeting, Kak Key said that Kok An was not worried about the trial, but was concerned that increasingly hostile reports about him in the Khmer media could damage his reputation within the Cambodian People’s Party as well as his position as a senator.
Kak Key also said his own practice was suffering and that senior staff were considering resigning. Besides drawing unflattering media attention over his role in the case, Kak Key had received two letters from the Ministry of Economy and Finance’s National Accounting Council about his audit. The first, on December 9, requested that he send a letter to the Phnom Penh Court of First Instance “as soon as possible” to confirm that his audit was unfinished. A second, on January 19, informed him that he had failed to respond properly to the first letter and reminded him of his ethical obligations as a member of Kampuchea Institute of Certified Public Accountants. (Kak Key has responded to both letters, and argued that he fulfilled his duties to the court.)
Follow the money
Kak Key has said it would take as long as two years to untangle the decade of financial transactions between the various accounts. Neither side has provided a detailed explanation about why so much money was flowing between the accounts, as well as overseas. Tep Kolap has said she was unaware of the transactions being made in the joint account she shared with her husband. A review of hundreds of transaction slips found her name on only a few, which Tep Kolap said were withdrawals to purchase land for Sok Im and to pay for the construction of a mansion for her.
After the hearing at the Appeals Court, Heng Chheang said the next step would be to call for an investigation by the Anti-Corruption Unit. He also accused Kok An of using his joint account with Tep Kolap to evade taxes.
Tep Kolap and Heng Chheang have both said that the case against them has been fabricated to grab Phnom Penh International University. They and their lawyers have said it marks an evolution in what human rights groups have called the country’s “land grabbing crisis”, and have warned that if they lose their appeal to the Supreme Court (which their lawyers will make after receiving the written decision from the Appeals Court) it could send a signal that Cambodia’s tycoons are in full control of the judicial system.
Tep Kolap and her family say they are determined to continue their battle. Although they rejected an earlier offer by the opposition Sam Rainsy Party to intervene on their behalf by lodging a complaint with the Anti Corruption Unit, they say they will file one now. Heng Chheang has also sued Kak Key, and complaints have been filed against judges at the Phnom Penh Municipal Court.
Complaints against judges at the Appeals Court will follow soon, lawyers for the couple said. At the same time, legal experts at universities in Cambodia are joining the defence. Their anger at the judicial system is rising, and the goal of ensuring that Tep Kolap’s release from prison is widening into a drive for judicial reform.