Acting RDB Head Demoted Amidst Charges of Irregular Loans

Vong Sandab, who was tapped to head the Rural Development Bank on a temporary basis in 1998, has been sent back to his old job amid charges that he improperly loaned $400,000.

He was a deputy department di­­rector at the Council for the De­v­el­opment of Cambodia when the Ministry of Finance sent him to RDB as acting director-general.

Finance officials reversed that decision on Oct 24, saying that Vong Sandab had lent money di­rect­ly to borrowers on two occasions without going through mi­cro-finance agencies as bank rules require.

Son Koun Thor, the new bank head, said Vong Sandab’s activities were a violation of bank reg­ulations. “The RDB has the right to make loans to micro-fi­nance operators, and then the mi­cro-finance operators loan the money directly to borrowers,” he said.

Vong Sandab said Wednesday his removal was unfair and unreasonable, and that officials should have dealt with him face-to-face, or sent him a letter detailing why he was being dismissed.

He does not dispute that he skipped the micro-finance operators to lend the money through two commercial banks in Phnom Penh, but says he was only trying to run the RDB efficiently.

“They are not following bank procedure,” he said. “I have a right to defend myself.”

He said that one of the loans for $200,000—to 10 groups in Kam­pot province who set up businesses extracting salt from saltwater—has been mostly paid back, with only $26,300 in arrears.

The second $200,000 loan, to a Kompong Thom man who plan­ned an extensive agricultural plan­tation raising rice, fruits and other products, has not been repaid because the plantation was destroyed by flooding, he said.

 

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