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Documents revealed in massive fraud case

Documents revealed in massive fraud case

The local subsidiary of a Hong Kong-based firm is embroiled in a lawsuit against its former directors who allegedly defrauded a foreign investor of millions of dollars and misused company funds, according to documents obtained by The Post yesterday.

The documents concern a court case brought by representatives of Hong Kong-based Enviro Group Holdings Limited who are suing John Davies and Lim Lian Tho – both former company directors of Phnom Penh-based subsidiary Enviro Corporation (Cambodia) Ltd – and Mark McCluskey, a lawyer for John Davies.

Lim Lian Siah, the brother of Lim Lian Tho and former general manager of Star Private Enterprise Ltd – a company that was bought by Enviro Corporation after it went bankrupt – is also being sued for the return of equipment purchased with company funds.

It is alleged in the documents that John Davies, Lim Lian Tho and accomplices falsified papers and deceived a group representative in Hong Kong into increasing the share capital of Enviro Group from 10,000 shares to 200 million shares in order to attract foreign investors in 2008. They then allegedly sold a Swiss investor 10 million shares worth around US$2.3 million, which was transferred to an account at the Foreign Trade Bank of Cambodia, from which they later withdrew around $575,000.

Sok Raden, executive director of Enviro Corporation in Cambodia and also a board director and shareholder at Enviro Group in Hong Kong, said yesterday that the subsidiary had  first filed a complaint on behalf of the group to Phnom Penh Municipal Court in 2008.

He claimed that company funds had also been misused to set up a subsidiary company in Malaysia – Enviro Corporation (Malaysia) – which listed John Davies and Lim Lian Tho as the sole shareholders and directors.

“The money sent to that company [in Malaysia]… [was] from the Hong Kong company. I asked the court to charge John [Davis] and all these associates who committed fraud and who misled to destroy the company,” he said.

He added that he wished the court to recoup $1.7 million for the Swiss investor, which he claimed remained at FTB, and retrieve funds allegedly used to open subsidiaries and to punish the three men for criminal offences. Contact details for lawyers representing the three accused were not available.

Nauv Thuok, director-general of the forestry department at the Ministry of Agriculture, Forestry and Fisheries, said yesterday that the government had granted Enviro Corporation more than 20,000 hectares of land for a seaweed development project in Kampot province, more than 10,000 hectares for development of jatropha in Kampong Speu province and an unspecified amount of land in Koh Kong. Jatropha can be used to produce biodiesel.

He added that the all of the company’s projects were postponed in 2008, due to a fraud case allegedly involving John Davies and Lim Lian Tho.

“The postponement of Enviro Corporation’s project activities has really affected villagers’  living conditions because they lost work and could not generate income to support their families,” he said.

Pol Lim, secretary of state at the Ministry of Interior, said that he was aware of the dispute but could not comment as the case was ongoing.

“In the future, the government will strengthen its laws and follow up all companies’ project activities after they are approved for land concession projects,” he said.

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