As Liquidation of Mfone Begins, Victims Abound

As insolvency proceedings against bankrupt telecommunications firm Mfone begin, yet another company, Smart Mobile, has filed a court complaint to collect unpaid costs from the mobile operator, and the list of parties to have suffered from the firm’s collapse continues to grow.

The Phnom Penh Municipal Court on Wednesday issued a notice appointing an administrator, Ouk Ry, to oversee the liquidation of Mfone’s assets and also issued a call for parties owed debts by the Thai-owned Mfone to come forward starting today.

The municipal court issued two injunctions, on October 18 and January 17, freezing Mfone’s assets, but that has not prevented the company from transferring roughly 400,000 mobile phone subscribers to local phone operator MobiTel.

Mfone announced the transfer of its subscriber base to MobiTel on January 11 and filed for insolvency on January 9.

It has been argued that Mfone’s subscribers represented the big­gest asset of the bankrupt firm, and there is uncertainty over what other assets the firm has that the court could use to reimburse firms still owed millions of dollars.

Chinese telecommunications firm Huawei Technologies Co. Ltd. has submitted a complaint alleging that Mfone owes more than $65 million in unpaid bills. Norwegian-owned Eltek claims it is owed $3.73 million by Mfone, and Smart Mobile—which completed a merger with Hello this week—confirmed on Wednesday that it has also filed a complaint seeking damages against Mfone for an undisclosed sum of money.

“We want to get our money,” said Thomas Hundt, CEO of the newly merged Smart firm.

Mr. Hundt declined to say when Smart Mobile filed its complaint or how much debt was involved, but said it was prior to the company filing for insolvency on January 9.

“It’s a sizeable amount of cash. [We filed] before [Mfone] filed for insolvency,” he said.

In September and October, both Smart Mobile and Hello threatened to file suit against Mfone for hundreds of thousands of dollars they claimed was owed to them in unpaid cross-network connection fees.

An official at Mfone’s parent company Thaicom in Bangkok referred questions to Singapore-based Shenington Investments, Mfone’s majority shareholder.

Another company to suffer from Mfone’s downfall is NTC, a local fiber-optic network carrier, who made a trade deal with Mfone to provide it with bandwidth in exchange for use of Mfone’s communications infrastructure to power its own network.

“There was no cash transaction. The reason it was very difficult for us is because in the [bandwidth for power] swap, they were taking care of all the electricity for us to power our equipment. Then, [about 10 days ago] power was just suddenly disappearing from our equipment and that’s not supposed to happen,” said Heath Shen, CEO of NTC. Mr. Shen said his company would not file against Mfone.

And yet another group hit by the bankruptcy, vendors left with worthless Mfone credit top up cards, yesterday filed a petition with the Ministry of Posts and Telecommunications.

In their complaint, the vendors demand that Telecommunications Minister So Khun intervene in their dispute with the defunct operator because the Mfone cards they purchased have not worked for more than a week, and despite Mfone customers still being hosted by MobiTel.

Ian Watson, MobiTel CEO, has declined to comment on the Mfone deal.

“We would like to appeal to his Excellency [So Khun]…that we have bought the credit from Mfone to sell and already paid the company, but as of February 6, the credits can’t be used because Mfone sold to MobiTel company,” the vendors wrote in their protest letter.

(Additional reporting by Phok Dorn and Kaing Menghun)

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