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Bank scam snares chairman

Bank scam snares chairman

THANEAKEAR Khmer (Khmer Bank) has closed its doors on the orders of the National

Bank, but its founder Heng Kim Y - stripped of his control of the bank by associates

- has vowed to regain the helm.

Kim Y, the bank's former general director, has been detained in Judicial Police prison

on charges of fraud and embezzlement brought against him by the bank's board.

"I am 100 percent right. Their charges are meaningless. I'll continue to fight

to regain my position," Kim Y said after a Jan 6 preliminary hearing at Phnom

Penh's Municipal Court.

"They [the board] violated the [bank's] law, so I must make them put it back

in order," he added before being locked-up at Judicial Police prison.

After the Municipal Court's denial of bail, Aing Eng Thong, Kim Y's lawyer, said

he would seek it from the Appeals Court. He said Kim Y is prepared to deposit all

his bank shares as guarantee he will appear at future court proceedings.

Six members of the board initiated the charges against Kim Y who, according to bank

sources, deflated the value of shares they bought in the business.

Inaugurated on Sep 27, 1996, Thaneakear Khmer started operating a month before a

license was issued by the National Bank of Cambodia (NBC).

NBC subsequently blocked the license after Kim Y's refusal to employ staff supplied

by the central bank.

After paying fines for operating without a license - and the subsequent granting

of an operating permit - the bank's activities were suspended while banking authorities

investigated "irregularities".

Sources said allegations by six shareholders prompted NBC to appoint KAK & Associés

- a private firm - as a provisional administrative body to check whether the books

of Thaneakear Khmer were in order.

After a two month audit of the bank, Kak Key, general director of the firm, reported

that Kim Y had breached numerous banking codes, including:

  • Fabrication of documents with the aim of deceiving shareholders and obstructing

    investigations;

  • collection of funds in violation of the bank's international regulations;
  • Misappropriation of funds for personal expenses;
  • Blatant violation of the bank's statutes.

Key, now the provisional administrator of Thaneakear Khmer, said that a general

assembly of stockholders, convened Dec 31, adopted his recommendations and gave Kim

Y a vote of no confidence.

"Heng Kim Y tampered with the shares of other shareholders. They lost confidence

in him after they saw the report [of inspection]," Key said.

But according to Kim Y's son, Nik-Sai Heng, his father was jailed Jan 2 without a

proper warrant being issued for his arrest.

"My father was treated 100 times worse than real criminals. Armed police blocked

his car on the street and took him," said Nik-Sai, who is also the bank's managing

director.

All charges made against his father - who holds 51 percent of the shares in the bank

- were "ridiculous," Nik-Sai said.

He added that his father was the victim of a "coup" carried out by NBC

and the board members who made the accusations.

"Undoubtedly, it is a coup against my father. It was very well planned for a

long time," Nik-Sai said.

He said the inspection of the bank's books after the license was already approved

was "stupid" and alleged Kak was responsible for altering the original

shareholder list.

"Kak Key is not an independent auditor. He takes orders from NBC. When we say

NBC, we mean Thor Peng Leath," Nik-Sai said.

The NBC's supervision department director, Kaing Tong Hean, refused a Post request

for an interview to discuss the allegation.

But Key said the inspection he conducted was fully independent of any interference

from the central bank.

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