Logo of Phnom Penh Post newspaper Phnom Penh Post - RAC brokers say "nothing fishy"

RAC brokers say "nothing fishy"

RAC brokers say "nothing fishy"

THE financial brokers of Royal Air Cambodge have denied the speedy birth of

their new national carrier was in any way unconstitutional as has been

claimed.

Secretary general of the Cambodian Development Council, Chantol

Sun, said the deal would likely make its way before the National Assembly - as

the constitution demands - "in due course".

"But if there are any MPs or

the National Assembly feel that this transaction needs to be approved all they

have to do is to ask [Finance Minister] Keat Chhon to explain to them," he

said.

A draft copy of the $10 million deal struck between the government

and Malaysian Helicopter Services has been leaked to various media in the past

week.

The million shows that MHS would pay $4 million and the government

$6 million in the form of an interest bearing loan from MHS.

However, the

Cambodian Constitution forbids any financial transactions being made on behalf

of the country without the approval from the National Assembly.

One

condition of the deal was that no regulatory action was being taken against

either party at the time of signing. Cambodian International Airlines [CIA]

sources - whose airline was closed on Dec 24 to make way for RAC - say they

would have taken legal action had they known the deal was about to be

made.

First Prime Minister Prince Norodom Ranariddh has dismissed CIA

boss Udom Tantiprasongchai's $100 million law suit for lost earnings, saying the

government could not only defend itself against the suit but

counter-attack.

RAC sources have been critical of CIA's safety and

suitability as a national carrier - charges that have angered the CIA camp as

baseless.

Chantol Sun said that Tantiprasongchai's claim that CLA's

closure had repercussions under the international air travel liability Warsaw

Convention was bogus.

"He should check - Cambodia is not a signatory

under that convention," he said.

The government, which holds 60 percent

of the share capital, must pay one-half of its 60 percent dividend share in loan

repayments.

MHS, in turn, is required to make royalty payments of $1

million a year to the government - less any interest accrued on the MHS

loan.

Chantol Sun said he did not understand what all the fuss about an

"unconstitutional" deal was.

"Keat Chhon signs deals of $28 million, $30

million with the World Bank [without National Assembly approval], how come

no-one questions that?"

He said the person who "stole" and leaked the RAC

draft deal to the press probably had a vested interest for doing so. "This

person is not ethical," he said.

"There is nothing fishy in this deal

nothing under the table, nothing whatsoever. It is a clean deal - I just don't

want to go into the terms and conditions of it. We have an obligation to keep

details of joint ventures confidential. It is not right to disclose such details

to the outside world, just like any joint venture."

"People should

understand the financial situation, we won't require $10 million in the first

year," he said.

Chantol Sun said that the $10 million "doesn't have to be

tomorrow", but it could be required as far as three years time or

longer.

He said that RAC's Malaysian partner would be asked to transfer

technology and equipment, and help with marketing and feeder

services.

"Basically we asked them to help run our airline and we will

learn from you. RAC will be controlled by the government," he said.

The

deal specifically states that the new airline will be managed by the Malaysian

management.

The government will nominate the chairman, chief executive

officer and the chief financial officer of RAC.

Malaysia will nominate

the chief operating officer, the commercial director, the deputy CFO and the

operations and maintenance directors.

The seven person board of directors

will be split between the government, which will have four [including the

chairman] and Malaysia which will nominate three. However, in the even of a tie,

the chairman will not have the casting vote.

MOST VIEWED

  • Hun Sen: Full country reopening to be decided in two weeks

    Prime Minister Hun Sen has announced that if the Covid-19 situation remains stable for 15 consecutive days from the end of the October 5-7 Pchum Ben public holiday, Cambodia will reopen fully, albeit in the context of Covid-19 whereby people have to adjust their lives to

  • Cambodia unveils new quarantine regulations

    The government has modified Covid-19 quarantine requirements, shortening the duration for, among others, Cambodian officials, foreign diplomats and delegations, investors and inbound travellers in general. According to an official notice signed by Minister of Health Mam Bun Heng late on October 16, quarantine length for Cambodian

  • Cambodia sets new Covid-19 quarantine rules

    The government has modified Covid-19 quarantine requirements, shortening the duration for, among others, Cambodian officials, foreign diplomats and delegations, investors and inbound travellers in general. According to an official notice signed by Minister of Health Mam Bun Heng late on October 16, quarantine length for Cambodian

  • Hun Sen: Cambodia set to fully reopen

    Prime Minister Hun Sen concludes that the October 5-7 Pchum Ben public holiday, during which many people either flocked to their hometowns for family reunion or gathered at tourist attractions across the country, has not caused an outbreak of Covid-19. In a special address to

  • Will Evergrande change the way Chinese developers do business in Cambodia?

    China’s property sector policy has exposed the grim financial condition of real estate developers including those operating in Cambodia, which raises questions over the viability of their projects and business going forward The dark blue netting draping over one of Yuetai Group Co Ltd’

  • Cambodia voted ‘world’s friendliest country’ in Rough Guides reader poll

    Cambodia ranked number one among the “World’s Friendliest Countries”, according to a reader poll conducted by London-based international website “Rough Guides”. Taking submissions through Twitter and Facebook, “Rough Guides”, a well-known travel agency and publisher of guidebooks, said the Kingdom “was by far the