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Agro giant denies rent overdue

Tycoon Mong Reththy shows off a rubber plantation at his Sihanoukville ELC in 2011.
Tycoon Mong Reththy shows off a rubber plantation at his Sihanoukville ELC in 2011. Heng Chivoan

Agro giant denies rent overdue

Mong Reththy Group, one of the Kingdom’s largest agro-industrial conglomerates, insisted yesterday that it had settled arrears on its palm oil concession more than six months ago, contrary to local media reports stating the company owed concession rental fees dating back nearly 20 years.

According to a statement by the Council of Ministers dated November 6 and seen by the Post, the government gave Mong Reththy Group three months to pay unspecified overdue fees on its palm oil economic land concession (ELC) in Preah Sihanouk province. The Council also reduced the duration on the contract from 70 years to 50 years.

Monivann Tan, vice president of the Mong Reththy Group, insisted that the company had already reached a settlement with the government, and had paid the first instalment of outstanding dues on its palm oil concession dating back to the contract’s issuance in 1996.

“We paid the fees on over 5,000 hectares of cultivated land, of a total of more than 6,000 hectares of land, in August last year,” he insisted. “We just paid these now because previously it was not clear how to pay – there were ongoing negotiations until 2015.”

According to the Council of Ministers, ELC concessionaires are required to pay an annual rental fee of $5 to $10 per hectare for high-quality land.

Tan said Mong Reththy Group reached an agreement with the government last year to pay $5 per hectare on its cultivated land in three scheduled instalments.

“We reached an agreement to pay step by step,” he said. “The first payment was $85,000, the second payment will be $57,000, and the third will be $58,000.”

Tan insisted the company made its first scheduled payment in August, so he was surprised by the Council’s November 6 directive calling for it to clear its outstanding arrears.

“We paid before November... and we have the invoice to prove it,” he said.

He admitted, however, that the company had not yet paid the rental fees on its adjacent 1,800-hectare cassava concession, claiming it was awaiting clear directives from the Ministry of Agriculture before settling the dues.

Tan said the payment calculation was complex, as the cassava concession’s land overlaps that of the company’s palm oil ELC and the boundary has not been clearly demarcated.

“We will pay once the ministry measures it,” he said.

Kuy Marindy, a member of the government’s inter-ministerial committee for collecting fees on land concessions, confirmed that the government received the first instalment of Mong Reththy Group’s overdue concession fees in August.

“The company paid via the National Bank of Cambodia’s operations department on 18 August 2015,” he said. “The amount was $85,693 for more than 5,256 hectares of cultivated land on palm oil land concession.”

Eang Sophalleth, spokesman for the Agriculture Ministry, said he was misquoted by local media, and had not accused Mong Reththy Group of delinquent payments.

He said previous administrations had not enforced regulations on ELC rental fees. However, the government took the initiative to clarify regulations and collect unpaid ELC rental fees after the incumbent Agriculture Minister, Ouk Rabun, took office in 2013.

Sophalleth said prior to receiving payment from Mong Reththy Group in August, the inter-ministerial committee notified the Council of Ministers of its accrued rental fees. The company subsequently paid; however, the Council was apparently not aware of the payment when it issued the directive in November.

“The directive was issued by the Council after seeing the company hadn’t paid, but in fact it had paid in August, and now we can confirm that,” he said.

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