N ATIONAL Bank governor Thor Peng Leath has said he does not mind if he is fired
because "I am already 60 years old. I would like to be able to take a cup of
coffee... I would like to travel... I would like to dance."
"I would like
to take a rest, but I can't because the government needs me to be here," said
Leath is in the teeth of an escalating banking scandal, following
allegations of impropriety and mismanagement, and foreign bankers have said that
if Leath did conduct the transactions he stands accused of, he certainly should
"If this scandal is true they are in no position to control the
bank," said one Singaporean banker here. "This is very serious to the banking
However, Second Prime Minister Hun Sen released a statement
earlier this week calling the rumors of Leath's sacking "poisonous" and
Hun Sen said "so far both Samdech Krom Preah and I have never
discussed and never thought there would be a change in the Governor of the
National Bank." He said Leath could not be removed without the agreement of both
Leath was appointed governor two years ago in a
political compromise that allowed the governor of the bank to be selected by CPP
and the deputy governor by Funcinpec.
In an interview with the Post on
June 15, Leath said he had already completed his primary goal by getting the
currency stabilized and introducing the new denomination riel. "My first job is
stability. I have reached my goal already. If I go away I will have fulfilled my
Leath denied any improprieties in the setting up of the
Credit Bank of Cambodia (CBC).
He said that when CBC shareholders came up
short of capital on May 31, 1994 - the last day new banking licenses were issued
- he took it upon himself to authorize a $3 million transfer of funds from the
National Bank to help them come up with enough capital for a license.
was not a loan. It was an entry," he said.
He defended the transfer of
funds, saying the government earned $24,000 interest on the "entry." He said it
would have been a shame if the Credit Bank couldn't open because they had
already prepared their building.
Leath said that he also authorized the
$145,000 withdrawal from CBC a few days after the bank had been shut down. He
said Var Huot, the ambassador to the United States, had been waiting for months
to get the money from the Ministry of Finance and when he finally got it he
decided to deposit it in Credit Bank, rather than keep it at home.
had a choice because we have 29 banks," said the governor. A couple of days
after the shutdown, the governor said, he personally intervened so that Var Huot
- who evidently needed the money for repairs to the embassy - could get the
Leath said that if the funds had been tied up or perhaps lost
in a liquidation proceeding "all Cambodians would be afraid. Cambodian people
don't trust the banking system."
"We are transforming from a socialist to
a liberal regime," he said, explaining that he had authority to make such
National Bank Deputy Governor Tioulong Saumura called both
transactions highly irregular but said how they would be judged "all depends on
the degree of tolerance of the government because everything is not perfect in
Cambodia by international standards."
Leath said that he has been asked
by the prime ministers not to leave the country.
He said it was because
"somebody" at the bank was going to be fired. "I have responsibility for the
institution. I have to remove them."
He said someone in the bank is
"trying to politicize and poison the atmosphere for Cambodia."
been more than two weeks since the two Prime Minister asked Chanthol Sun,
secretary general of the Council for the Development of Cambodia (CDC) and a
former audit manager for General Electric, to audit the mess.
little has happened, other than a committee having been appointed to
investigate. Chanthol Sun initially said the investigation would only take a few
"We are going to look at every record to see if there are
discrepancies," he said.
Leath has objected to allowing the Ministry of
Finance to look at National Bank files. He said he regarded that as
inappropriate because the Ministry of Finance and the National Bank needed to be
"I have expressed my opinion to the prime ministers that it
should be another person from the Council of Ministers, not be from the Ministry
of Finance," he said.
Leath said that he didn't think that the bank
scandal was hurting Cambodia's image with foreign investors because he is
perceived as being very "strict" with the banks he regulates on such matters as
filing their reports on time.