Dubious ’97 Bank Loan Puts Gov’t Officials in Court Clash Puts Officials In Court Clash

A prominent government official has been ordered by the Municipal Court to return property to a powerful banker two years after a dubious deal connected to the nation’s cash-crunch following July 1997 factional fighting.

The court ruled Thursday that former National Bank Governor and current Constitutional Coun­cil member Thor Peng Leath must return a Don Penh district house to Pung Kheav Se, the director general of Canadia Bank, one of the nation’s most prominent commercial banks.

Thor Peng Leath said he had paid for the house. Pung Kheav Se maintained that he did not. Without any receipt to back Thor Peng Leath’s claims, the court ruled in favor of Pung Kheav Se.

Both Thor Peng Leath and Pung Kheav Se admit Thor Peng Leath approved a National Bank of Cambodia loan of $500,000 to Canadia Bank to help keep the bank afloat as depositors withdrew money and fled Cambodia and the 1997 political violence.

But accounts from both men on the exchange of the three-apartment rental house differed in court and in interviews.

“I already paid all $120,000 [for the house], plus an extra $10,000 for paperwork,” a disgruntled Thor Peng Leath told reporters at his residence Thursday after the ruling. “But the agreement did not have the official payment receipt.”

on the exchange of the three-apart­­ment rental house differed in court and in interviews.

“I already paid all $120,000 [for the house], plus an extra $10,000 for paperwork,” a disgruntled Thor Peng Leath told reporters at his residence Thursday after the ruling. “But the agreement did not have the official payment receipt.”

A legal adviser to Canadia Bank, Roth Kumnith, said Friday that he was pleased with the court decision.

Pung Kheav Se explained Sun­day that he never planned to sell the house but only to give it to Thor Peng Leath “to consider the loan.”

Thor Peng Leath served as National Bank governor from 1994 to 1998, setting economic policy for Cambodia and controlling currency supply. He left the bank after allegations of corruption and incompetence.

Pung Kheav Se, a Cambo­dian-Canadian, opened Canadia Bank in 1995. Before returning to Cambodia in 1991, he had founded a Montreal money-changing company that was accused in 1995 of laundering funds.

The dispute that ended up in court Thursday started when Canadia Bank asked the National Bank for $3 million to remain operating during the July 1997 turmoil, Pung Keav Se said Sunday, adding that he had the bank draw up paperwork for the house title assuming the loan would be for the full amount.

He said he had the title drawn up, using his wife and Thor Peng Leath’s wife as “pretend” seller and buyer. Then he gave the house to Thor Peng Leath, who also said Thursday that the transaction was done in the names of their wives.

The new title was delivered to Thor Peng Leath, but consideration of the loan remained de­layed. When it became clear the loan was a fraction of the millions requested, Pung Keav Se said, he wanted the house back.

Thor Peng Leath maintains the court case was a personal attack against him. He asserted that because he approved loans for less than Canadia Bank requested, and because it was known that he would vie for the presidency of the Constitutional Council against Pung Kheav Se’s uncle, Pung Peng Cheng, the private banker sued.

During his meeting with Canadia Bank employees Sun­day, Pung Keav Se outlined his version of the case.

Canadia Bank paid 4 percent interest on the $500,000, 3 percent higher than normally required, he claimed.

“I think the 3 percent was a bribe to Thor Peng Leath,” Pung Keav Se claimed, alleging that $11,000 appeared in Thor Peng Leath’s account soon after the transaction.

“Canadia Bank was facing

trouble” in 1997, he said. “Like water through the nose. [Thor Peng] Leath made money from us totaling $116,000.”

But Thor Peng Leath maintained Thursday that it was he who lost money—$120,000.

“I paid him right here at this table,” he said, pointing to a round table on his porch. “I understand him. He came to my house 50 times when I was a bank governor.”

Thor Peng Leath said he does not plan to give the house back. He has the keys and the title, he said, and he will appeal to the Supreme Court. “I thought we did not need a receipt,” he said, “because we are VIPs.”

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