Australian police have reopened inquiries looking into whether the mining company OZ Minerals illicitly paid hundreds of thousands of dollars to family members of officials inside Cambodia’s Ministry of Industry, Mines and Energy when buying out its partner in 2009, Australian media have reported.
The move by the Australian Federal Police (AFP) comes after a report by the Organization for Economic Cooperation and Development (OECD) in October, which criticized the AFP’s investigations into bribery of foreign officials by Australian companies.
Although the report did not name the companies involved, it cited a case bearing striking resemblance to the events that unfolded around OZ Minerals’ since-abandoned operations in Cambodia.
In May 2011, it emerged that OZ Minerals had paid a total of $1.15 million to the relatives of Ministry of Industry, Mines and Energy officials, who were shareholders of Shin Ha Mining Co.-—a local concern OZ Minerals was buying out to obtain a gold exploration project in Mondolkiri province.
The OECD made reference to the inquiry as the “joint-venture buy-out case.”
“The AFP can confirm that two cases highlighted by the OECD are being reviewed,” AFP spokesman Andrew Gordon said in an email.
The Sydney Morning Herald yesterday quoted Errol Raiser, leader of the AFP’s special references unit, saying that the AFP “are going to review a medical equipment case and [what the OECD called] the joint-venture buyout case.”
In 2009, OZ Minerals bought out its joint venture partner in the Okvau mining project, Shin Ha, a firm founded in 2005 by South Korean investor Wujin Park.
Four female shareholders of Shin Ha were paid hundreds of thousands of dollars each in dividends when OZ Minerals bought them out to take control of the mining project.
Sok Sunnary, the mother-in-law of Keo Ratanak, former chief of the ministry’s Cabinet and the current managing director of Electricite du Cambodge, received $462,000, according to a document outlining the details of the deal.
Sok Sovanchivy—the daughter of Sok Leng, who is the director general of the ministry’s general department of mineral resources —and Sar Sa Um—the mother-in-law of another director in the department, Yos Monirath—both got payouts of more than $230,000 for their stakes in Shin Ha Mining.
Ministry officials, including Minister Suy Sem, have denied any wrongdoing. Mr. Sem and Mr. Ratanak declined to comment.
Rachel Eaves, public affairs manager at OZ Minerals, said yesterday that the company had not been approached by AFP.
“We have had no contact from the AFP on any matter, but of course if the AFP wants to discuss anything with us then we would be happy to talk to them,” she said in an email from Melbourne.
In February 2012, a spokeswoman confirmed that AFP had decided not to investigate OZ Minerals over the payments due to “insufficient information.”
OZ Minerals has since offloaded its Cambodian gold project to another Australian firm, Renaissance Minerals, although it retains a large financial stake in the project.
The OECD report said allegations in the case “rais[ed] the prospect that these officials were the ultimate beneficiaries of the buy-out proceeds.”
“The AFP declined to open an investigation because it received information from the AFP’s overseas network that the transaction had been undertaken with due diligence and that all payments were made at the joint venture partner’s request,” the OECD report said.
OECD’s examiners concluded they were “concerned that the AFP may have closed foreign bribery cases before thoroughly investigating the allegations. This may be supported by the Joint Venture Buyout Case.”
(Additional reporting by Khuon Narim)