In the run up to the arrival of Malaysian Prime Minister Najib Razak to Cambodia this week, the expectation of $1 billion in investment seemed an enticing prospect for Cambodia’s economy.
The Malaysian business delegation to Cambodia hastily played up the investment deals between the two countries, and the Malaysian news agency Bernama cited the “vast opportunities for Malaysians to explore Cambodia’s services sector such as education, healthcare, construction, halal industry, tourism and oil and gas.”
“Malaysian investors will facilitate a total investment in Cambodia in excess of $1 billion,” Ramli Kushairi, leader of the Malaysian business delegation to Cambodia, told a business forum between the two countries on Monday.
The reality behind the 64-company delegation’s arrival here was that the Cambodian government apparently invested $700 million in Malaysia, and not the other way around. Much like bilateral trade relations between the two countries—90 percent consists of Malaysian imports—Cambodia was doing the bulk of the buying.
According to copies of the agreements received this week, minus the $700 million Nexbis deal, the total value of the investment deals agreed between Cambodian and Malaysian businesses was roughly $14.3 million, according to documents provided by the Phnom Penh Chamber of Commerce.
That $14.3 million consisted of a $6 million venture in halal food production, an $8 million investment in 20 bistros and a $300,000 investment in chicken farms. Where the remaining $285.7 million is accounted for, nobody seems to know.
On Monday, agreements were also reached between the Asia e-University and Cambodia Mekong University for a training program and the establishment of business councils in the two countries to help boost trade levels. Both deals came with no direct costs, according to a copy of the agreement.
Bernama reported Tuesday that Mr Najib said on his departure at Phnom Penh International Airport that Malaysian and Cambodian businessmen had negotiated $136.6 million worth of deals during Monday’s business forum.
Beyond the $14.3 million, Mohamed Azahar, trade commissioner in Vietnam and Cambodia for the Malaysia External Trade and Development Corporation, said that if any other deals were signed this week, officials from Matrade had not been informed. The same can be said for officials at the Malaysian Business Council of Cambodia and the Phnom Penh Chamber of Commerce.
The company behind the Cambodian government’s $700 million investment is the Kuala Lumpur-headquartered Nexbis Sdn Bhd, a Malaysian company owned by Nexbis Limited, which is listed on the Australian Securities Exchange.
Since news of the $700 million deal was made public, government officials and local businessmen alike have raised eyebrows at the investment’s sticker price.
To date, Nexbis, which has lost 75 percent of its share prince since August, still has not announced this deal to the ASX in Sydney and the company’s share price has seen no positive movement, closing down 6.67 percent yesterday at A$0.14.
But that may not prove too out of the ordinary for a firm that has had shadows of doubt cast over it by the Australian media since last year.
The Sydney Morning Herald took on its own journalistic onslaught against the company in March when it highlighted how many investors “struggle to comprehend what exactly the technology company Nexbis Limited actually does.” The newspaper has also underlined a number of deals carried out by the company with Asian governments that never came to fruition.
Officials in Cambodia have said that Nexbis will help the government streamline its national security systems by printing new passports and providing Cambodia with a “turnkey national security system,” as it was called in a copy of the agreement received this week.
Both government officials and the opposition SRP have raised questions as to exactly how Cambodia will pay for such a large deal, which amounts to more than a third of this year’s entire national budget.
A receptionist at Nexbis’s headquarters in Kuala Lumpur said yesterday that the company’s communications team was in meetings all day and could not be reached.