Company acknowledges 75 percent takeover of state-owned insurance firm was finalised in November with Prime Minister Hun Sen’s backing
THE government sold three-quarters of its stake in state insurance company Caminco last year for US$5.7 million, the new majority shareholder confirmed on Monday. The deal, whose existence has not yet been made public, sees the government retain 25 percent of Caminco.
Caminco's new Managing Director Duong Vibol of Viriya BVB Insurance Plc told the Post on Monday that the deal was agreed in June 2008 - when full payment was made - and transfer of ownership was completed in November. He added that the deal was approved by Prime Minister Hun Sen.
Existence of the deal is not widely known. Cheam Yeap, the head of the National Assembly's banking and finance committee and a Cambodian People's Party (CPP) member, told the Post on Thursday that he knew nothing about it.
The deal came to light in a brief Asian Development Bank (ADB) report released last week that evaluated ADB's technical assistance program designed to improve the government's running of the finance sector. Part of that program was improving the running of Caminco, with an eye to a sale, said the report.
ADB said that the new owners were a joint venture comprising an insurance company from Thailand and a Cambodian investor. That was incorrect, said Duong Vibol, who confirmed he is the Cambodian investor mentioned by the ADB.
I had already registered Viriya BVB so I used Viriya BVB to buy Caminco shares.
Duong Vibol said the new majority owner of Caminco is Viriya BVB Insurance plc, a purely Cambodian company, adding that the company has no relationship with Thai insurance company Viriya Insurance, although he said he had come close to an arrangement.
"Viriya Insurance in Thailand gave an exclusive for me to start an agency or brokerage [in Cambodia] on behalf of Viriya [Thailand]. But instead of that I was thinking that I start a company with the name of Viriya and my company BVB," he said.
"I was supposed to start another insurance company on behalf of Viriya [Thailand], but I didn't start that business," he continued. "I had already registered Viriya BVB so I used Viriya BVB to buy Caminco shares."
Duong Vibol said that his company had discussed an agreement with Viriya Insurance in Thailand in which the Thai company would provide technical assistance to the newly privatised Caminco, but he later decided against it.
The ADB noted that better financial results from Caminco in 2007 led a successful sale. Duong Vibol said Caminco's results in 2006 showed net income of US$120,000, which more than tripled to $380,000 in 2007. Last year net income was down to $100,000, he said.
The ADB report notes that a previous effort to offload a stake in Caminco had been unsuccessful. The report said that in 2006 a list of 20 international companies was drawn up, with three companies shortlisted.
But after signing nondisclosure agreements, two of them (unnamed New Zealand and Singaporean firms) turned down Caminco, the report said. The third company - UK giant Prudential - expressed some interest then went quiet.
In December 2007, Caminco renewed its five-year operating licence. Caminco's main premium income is from motor insurance.