Four senior members of Senate President Chea Sim’s inner circle who were charged with forgery and fraud on Wednesday had allegedly tricked Mr Sim into signing a bogus contract that would have paid $120 million of government money to a foreign company, documents submitted to the court show.
The contract was one of four similarly bogus deals that were supposed to see a total of $500 million paid to several foreign and local firms to build everything from car service centers to hospitals, schools and roads in Cambodia.
According to documents submitted to the court, four of Mr Sim’s officials conspired to convince him to sign and stamp a contract on Dec 30, 2010, in which the Senate agreed to pay $120 million to a Malaysian company over a period of four years.
Mr Sim, according to the documents compiled by military police investigators, believed he was endorsing a project that aimed to build a large vocational training center for mechanics in Cambodia with funds raised by a charitable foundation based in Phnom Penh. The contract, however, stated that the Senate would foot the bill for what was actually an automotive service center, and pay the Malaysian company to carry it out.
“The contract, dated Dec 30, was not about a $120 million donation to build a mechanic center, but it required the Senate to repay $120 million [to the company],” the military police report said.
On Wednesday, Phnom Penh Municipal Court charged Pheng Kunthea Borey, 56, the well-known protocol chief and adviser to Mr Sim, with fraud.
Immigration police arrested Ms Kunthea Borey as she tried to flee into Thailand through the Cham Yeam International Checkpoint in Koh Kong province.
The municipal court also charged police Lieutenant General Chan Kosal, 60, a former adviser to Mr Sim, and Khieu Bora, 50, a former member of Mr Sim’s Cabinet, with document forgery, and Lieutenant General Ponlork Ho, 58, another former adviser to Mr Sim, with forging documents, using forged documents and fraud.
According to the court documents, a military police investigation found that Ms Kunthea Borey had tricked Mr Sim into signing the Dec 30 contract, which promised the Senate would pay $120 million to Malaysian company Fasfik Group, an automotive repair and construction firm, for the machinery project.
When representatives of Fasfik came to collect the first installment of the promised money from Mr Sim on Sept 19, the Senate president authorized Lieutenant General Yim Leang, the newly appointed chief of Mr Sim’s bodyguard unit, to investigate.
The court documents state that Lt Gen Leang was authorized to investigate “every irregular and fraudulent document…which has already been signed.”
Lt Gen Leang then filed a complaint with the Phnom Penh Military Police accusing Lt Gen Kosal, Lt Gen Ho and Mr Bora, who had facilitated the meeting between the Malaysian firm and Mr Sim, of conspiring in fraud and forgery.
In an interview yesterday, Lt Gen Leang alleged that Ms Kunthea Borey was the ringleader of the scheme, and that her closeness to Mr Sim had allowed her to fool the Senate president into signing the documents.
“Samdech [Mr Sim] trusted her very much. He completely trusted her, and she manipulated documents,” he said, adding that the arrests of Lt Gen Ho, Lt Gen Kosal and Mr Bora led to Ms Kunthea Borey’s arrest.
According to the same court documents, Ms Kunthea Borey collected $5,000 to $6,000 for each of Mr Sim’s signatures on the documents that the Malaysian firm thought had sealed their multi-million-dollar deal.
On Sept 20, Prime Minister Hun Sen advised Mr Sim to file a complaint against the suspects with the court, according to the court documents.
During questioning, Lt Gen Ho admitted to his involvement in the projects.
“I did the projects because I wanted commission from the projects. If the projects were successful, I would get 10 percent commission,” Lt Gen Ho is quoted as saying.
It is not known if the Malaysian company paid the facilitators in Mr Sim’s circle for sealing what must have seemed a very lucrative deal to set up operations in Cambodia.
Lt Gen Kosal, Lt Gen Ho, and Ms Kunthea Borey are all referred to on the website of Fasfik Group’s Managing Director Armin Baniaz Pahamin.
According to the website, Lt Gen Kosal and Lt Gen Ho, who are described as well-connected police officials, made trips to Malaysia in the past year and were helping facilitate what now appears to be the bogus $120 million deal.
The website also carries pictures of Lt Gen Kosal introducing Mr Baniaz Pahamin to Mr Sim and Ms Kunthea Borey in Phnom Penh in late 2010. Mr Baniaz Pahamin is reported to be currently in Cambodia.
Mr Baniaz Pahamin yesterday responded to questions on his website, saying that the arrests had nothing to do with his company.
“The four top senior officials arrested were not arrested for any investment involving our company,” he wrote.
“Lt Gen Ponlork Ho, the advisor to Senate president with the rank of secretary of state, is a personal friend. We do not have any business relationship with Lt General Ponlork Ho,” he added.
According to the documents, the military police found that Ms Kunthea Borey had brought several similar contracts from different firms to Mr Sim to sign.
The other projects signed by Mr Sim include schools and hospitals in Phnom Penh and Siem Reap province, and a $90 million road project in Svay Rieng province.
“Each project did not proceed,” the military police reported in documents submitted to the court.
Lt Gen Kosal, Lt Gen Ho, Mr Bora and Ms Kunthea Borey are currently in pretrial detention at Prey Sar prison in Phnom Penh.
(Additional reporting by James Welsh)