Former Head of Indochine Denies Irregularities ERd

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?”