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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.

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