The former head of Indochine, once Cambodia’s largest insurance company, dismissed charges on Thursday that his company in any way defrauded the state-run insurer Caminco of premiums it was owed.
Philippe Lenain’s denial came one day after Finance Ministry Secretary-General Hang Chuon Naron accused him of financial irregularities that caused the government to lose vast amounts in revenue due to Lenain shortchanging Caminco.
Indochine was shut down by the government in October 2004 for failing to deposit $700,000 as a reserve in the National Bank of Cambodia. Lenain argues the closure was improper, and is seeking $4 million in damages.
Hang Chuon Naron stated on Wednesday that the former head of Caminco, Oun Taing In, was removed in 2002 for his involvement in the alleged irregularities.
The removal came after it was discovered that Indochine, which had been operating as a commissioned agent for Caminco, was giving Caminco only 5 percent to 10 percent of premiums collected from clients, Hang Chuon Naron said.
According to industry standards, it should have been the other way round, Hang Chuon Naron added.
“What happened to [the] above money was [and visibly is still] the [Ministry of Finance’s] problem,” Lenain wrote in an e-mail on Thursday.
“Until 2002, Caminco had no capital,” said Lenain, who claimed that Caminco, as little more than a department of the Ministry of Finance, had little money to operate as an insurance company.
Lenain said that Caminco retained 10 percent to 40 percent of the premiums he sold through Indochine.
Until it became a licensed insurance company on Jan 8, 2003, Indochine was an agent of Caminco and paid taxes and commissions it owed to Caminco regularly, he added.
Central to the conflict between Indochine and the Cambodian government is a $3 million factory fire claim, which neither party is willing to pay.
Lenain wrote that Phnom Penh Municipal Court ruled twice that Caminco was the principal insurer of the Grantex factory, which was destroyed by fire, while Indochine was merely the agent.
Vong Sandap, the current director-general of Caminco, said Caminco is certain Lenain is responsible for the Grantex claim.
“Indochine broke its contract…it was an agent for Caminco but its activity was bigger than the parent company,” he said. “Lenain knows he made a mistake.”
Hang Chuon Naron added that in such a case, the judge would need to examine which company is getting the majority of the premiums.
“The degree of responsibilities for the claims is proportional to the percentage of premiums each party received,” he wrote.
“How can one explain that Indochine Insurance got 90 percent of the premiums and transferred 100 percent of the responsibilities to Caminco?”