https://asia.nikkei.com/Spotlight/S...es-to-drain-the-swamp-with-arrest-of-tycoons?
Cambodian Prime Minister Hun Manet's new government has denied connections to a detained tycoon. (Photo by Hiroki Endo)
FIONA KELLIHER and MECH DARA, Contributing writersMarch 27, 2024 15:57 JST
PHNOM PENH -- A Cambodian tycoon has been arrested after she allegedly swindled investors out of hundreds of millions of dollars, the latest in a growing list of freewheeling elites accused of fraud.
Leng Channa, a 35-year-old businesswoman who became known for lavish donations to local governments, was charged with fraud and money laundering this month. She was also stripped of her oknha title, an honorific meaning "lord" or "duke" conferred on those who donate at least $500,000 to the government.
The charges stemmed from a high-profile scandal in Siem Reap province, home to the Angkor Wat temple complex, where thousands of families say they lost large sums to Channa's real estate projects or a high-dividend investment fund in the last two years. Many took out microfinance loans to invest in her offerings.
One Siem Reap resident, who requested anonymity, told Nikkei Asia that he and his parents borrowed over $25,000 from banks after watching Channa's company, Brilliant City World, gain traction on TikTok.
A former farmer, the man initially received high returns and began working for the company, persuading people to invest and using the new funds to pay out dividends in what turned out to be a Ponzi scheme. But starting around November, the money stopped flowing in, and the farmer is now struggling to keep up with $600 monthly loan repayments.
"I'm scared I don't have enough to pay back the bank," he said. "All my cows and buffalo have been sold, and my parents, uncle and grandmother have sold their jewelry. Our couple hectares of cassava plantation have been sold, too. Now we have nothing."
Thousands of families in Siem Reap province, home to the Angkor Wat temple complex, say they were scammed by tycoon Leng Channa. (Photo by Ken Kobayashi)
Channa's arrest comes as the Cambodian government, led by new Prime Minister Hun Manet, has tried to project an image of good governance amid growing frustration with a tycoon class that has become notorious among ordinary Cambodians for land grabbing, money laundering and connections to human trafficking.
Last spring, a group of the country's most powerful oknha created a formal association under the direction of former Prime Minister Hun Sen, aiming to teach newer tycoons "ethics" and improve public relations.
Since then, two other oknha -- Chea Saron and Hy Kimhong -- have been arrested and charged with fraud for separate alleged investment rackets in Kampot and Takeo provinces. Cambodia's Real Estate Business and Pawnshop Regulator has meanwhile warned against investing in a dozen real estate or land plot projects it said are operating without licenses, several of which are registered to tycoons.
There are an estimated 1,500 tycoons with the oknha designation, which was initially intended to honor people who gave to charity and public works. But it has lost much of its luster over the years as the title has been doled out with increasing frequency to those who can pay the hefty fee.
In a rare rebuke, the Government Spokesperson's Unit denied Channa's claims on social media that Hun Manet was connected to her business, emphasizing that the prime minister did not support any companies "besides urging the competent authorities to take strict action against anyone who links him with their illegal activities."
But experts say that cracking down on lower-level tycoons lets the government enforce laws and maintain stability without upsetting the inner patronage system that relies on a flow of personal favors, private deals and corruption between businesspeople and officials.
In fact, some influential oknha have welcomed the attention. After Channa's arrest, agriculture tycoon Hun Lak, spokesperson for the Cambodian Oknha Association, told a government-aligned news outlet that authorities should create a law to formally define oknha duties and revoke titles "in order to protect the prestige, honor and reputation of good tycoons."
"The bottom line is that we are dealing with seniority in a patronage economy," said Sophal Ear, a Cambodia expert at Arizona State University's Thunderbird School of Global Management. "These guys are too low on the totem pole, making them easy targets. If the established oknha were targeted, all hell would break loose and we would actually believe there is change afoot."
Pech Pisey, executive director of anti-corruption organization Transparency International Cambodia, said the creation of the association and recent arrests illustrate the desire of the country's most powerful "to drain the swamp of bad elites who can potentially damage the government's reputation."
At least six oknha, including Channa, who received the title between 2019 and 2020, have since been arrested or publicly accused of unscrupulous activities, according to a Nikkei count.
"Law enforcement is implemented selectively," Pisey said. "Alleged scammers who are well-connected still enjoy impunity."
Even tycoons convicted of crimes have been known to receive lighter punishments. And so far, neither Chea Saron nor Hy Kimhong, who were arrested for fraud in recent months, have been tried in court; Kimhong was released on bail in November. Court spokespeople told Nikkei that authorities are still "in the process of investigating" the cases.
The Siem Reap farmer said Channa's seeming connections to Cambodia's elite "made me and other people strongly believe without questioning."
"The bank is coming to my home every day," he said. "If I hadn't believed in the company, my family would not be facing this."
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Cambodia moves to 'drain the swamp' with arrest of tycoons
Accused swindler Leng Channa is third 'lord' to face legal action in recent months
Cambodian Prime Minister Hun Manet's new government has denied connections to a detained tycoon. (Photo by Hiroki Endo)
FIONA KELLIHER and MECH DARA, Contributing writersMarch 27, 2024 15:57 JST
PHNOM PENH -- A Cambodian tycoon has been arrested after she allegedly swindled investors out of hundreds of millions of dollars, the latest in a growing list of freewheeling elites accused of fraud.
Leng Channa, a 35-year-old businesswoman who became known for lavish donations to local governments, was charged with fraud and money laundering this month. She was also stripped of her oknha title, an honorific meaning "lord" or "duke" conferred on those who donate at least $500,000 to the government.
The charges stemmed from a high-profile scandal in Siem Reap province, home to the Angkor Wat temple complex, where thousands of families say they lost large sums to Channa's real estate projects or a high-dividend investment fund in the last two years. Many took out microfinance loans to invest in her offerings.
One Siem Reap resident, who requested anonymity, told Nikkei Asia that he and his parents borrowed over $25,000 from banks after watching Channa's company, Brilliant City World, gain traction on TikTok.
A former farmer, the man initially received high returns and began working for the company, persuading people to invest and using the new funds to pay out dividends in what turned out to be a Ponzi scheme. But starting around November, the money stopped flowing in, and the farmer is now struggling to keep up with $600 monthly loan repayments.
"I'm scared I don't have enough to pay back the bank," he said. "All my cows and buffalo have been sold, and my parents, uncle and grandmother have sold their jewelry. Our couple hectares of cassava plantation have been sold, too. Now we have nothing."
Thousands of families in Siem Reap province, home to the Angkor Wat temple complex, say they were scammed by tycoon Leng Channa. (Photo by Ken Kobayashi)
Channa's arrest comes as the Cambodian government, led by new Prime Minister Hun Manet, has tried to project an image of good governance amid growing frustration with a tycoon class that has become notorious among ordinary Cambodians for land grabbing, money laundering and connections to human trafficking.
Last spring, a group of the country's most powerful oknha created a formal association under the direction of former Prime Minister Hun Sen, aiming to teach newer tycoons "ethics" and improve public relations.
Since then, two other oknha -- Chea Saron and Hy Kimhong -- have been arrested and charged with fraud for separate alleged investment rackets in Kampot and Takeo provinces. Cambodia's Real Estate Business and Pawnshop Regulator has meanwhile warned against investing in a dozen real estate or land plot projects it said are operating without licenses, several of which are registered to tycoons.
There are an estimated 1,500 tycoons with the oknha designation, which was initially intended to honor people who gave to charity and public works. But it has lost much of its luster over the years as the title has been doled out with increasing frequency to those who can pay the hefty fee.
In a rare rebuke, the Government Spokesperson's Unit denied Channa's claims on social media that Hun Manet was connected to her business, emphasizing that the prime minister did not support any companies "besides urging the competent authorities to take strict action against anyone who links him with their illegal activities."
But experts say that cracking down on lower-level tycoons lets the government enforce laws and maintain stability without upsetting the inner patronage system that relies on a flow of personal favors, private deals and corruption between businesspeople and officials.
In fact, some influential oknha have welcomed the attention. After Channa's arrest, agriculture tycoon Hun Lak, spokesperson for the Cambodian Oknha Association, told a government-aligned news outlet that authorities should create a law to formally define oknha duties and revoke titles "in order to protect the prestige, honor and reputation of good tycoons."
"The bottom line is that we are dealing with seniority in a patronage economy," said Sophal Ear, a Cambodia expert at Arizona State University's Thunderbird School of Global Management. "These guys are too low on the totem pole, making them easy targets. If the established oknha were targeted, all hell would break loose and we would actually believe there is change afoot."
Pech Pisey, executive director of anti-corruption organization Transparency International Cambodia, said the creation of the association and recent arrests illustrate the desire of the country's most powerful "to drain the swamp of bad elites who can potentially damage the government's reputation."
At least six oknha, including Channa, who received the title between 2019 and 2020, have since been arrested or publicly accused of unscrupulous activities, according to a Nikkei count.
"Law enforcement is implemented selectively," Pisey said. "Alleged scammers who are well-connected still enjoy impunity."
Even tycoons convicted of crimes have been known to receive lighter punishments. And so far, neither Chea Saron nor Hy Kimhong, who were arrested for fraud in recent months, have been tried in court; Kimhong was released on bail in November. Court spokespeople told Nikkei that authorities are still "in the process of investigating" the cases.
The Siem Reap farmer said Channa's seeming connections to Cambodia's elite "made me and other people strongly believe without questioning."
"The bank is coming to my home every day," he said. "If I hadn't believed in the company, my family would not be facing this."
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