A tycoon arrested on Tuesday by military police on fraud charges yesterday walked free after striking a deal with the man he defrauded, court officials said.

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Meas Chanpiseth, deputy prosecutor of the Phnom Penh Municipal Court, said that 52-year-old tycoon Peang Kosal, executive director of the Banya Group Company, was released yesterday after negotiations with the plaintiff.

“The compromise was reached between the two parties. Tycoon Peang Kosal was released by authorities after he agreed to pay all money owing to the plaintiff,” Meas Chanpiseth said.

Kouy Thunna, defence lawyer for Peang Kosal, said his client was accused by Ly Keat, General Director of the GM Co, Ltd, of cheating US$23,000 from him in connection with the construction of roads into the New Angkor City in Siem Reap province in 2009.

Ly Keat alleged that Peang Kosal had not paid the money owed to him under the contract.

“My client was released after he paid $4,000 to Ly Keat today, and has promised to pay all his debt moneys to the plaintiff within the next 15 days,” Kouy Thunna told the Post yesterday.

Peang Kosal denied he had cheated Ly Keat as accused but rather had had a misunderstanding with the plaintiff over a contract between their two companies.

He also denied his reported involvement with Senate president Chea Sim and Chea Sim’s former protocol chief, Pheng Kunthea Borey, who was sentenced to four years in prison for fraud and forging public documents late last year.  

“I was not Samdech Chea Sim’s advisor, nor I was close to Pheng Kunthea Borey,” he said, adding: “This was only a private and individual case.”

Ly Keat, General Director of the GM Co Ltd, declined to comment about his case yesterday.

According to a copy of Ly Keat’s complaint dated February 3, 2012, which was obtained by the Post yesterday, the businessman alleges he had contracted Peang Kosal to construct roads for him and coughed up $46,000 in advance payments, only to discover no roads were ever built.

“After waiting a long time for the project, I went to see the site, but I found that the only project that was there was the wind. There was no road construction project as he had told me. He had cheated me,” Ly Keat said in the complaint.

After Ly Keat confronted Peang Kosal about the failure to build roads, the latter returned a portion of the advance payment to him, but then absconded, still owing about $23,000 until his arrest on Tuesday.