Phnom Penh Court bars man from selling Cambodia Advance Communications shares; firm denies he owns any
The Phnom Penh Municipal Court has issued an injunction ordering a Saudi Arabian man not to sell his alleged shares in the telecommunications company Cambodia Advance Communications, though the company’s CEO says the man has never owned any shares and called the issue a “misunderstanding” that sent the wrong message to investors.
Municipal court Judge Sin Visal issued the injunction on Feb 5 against Saud Ben Khudair, the former CEO of the Saudi-owned Cadcomms, which owns the mobile telephone network qb, stating that Mr Khudair was prohibited from divesting any of his shares in the company and accessing any of his cash held in Cambodian banks while a dispute over the loan he took from local businesswoman Chhim Nala is resolved.
Cadcomms’ new CEO Alan Sinfield said on Wednesday that Mr Khudair, who left the company in September 2009, never owned any shares in the company, which is mainly owned by Saudi Arabian investors.
Mr Sinfield said the loan was a “personal dispute” between the former CEO and the lender and had absolutely nothing to do with the firm.
“We are distressed about this issue because it unfairly penalizes the company and its shareholders and Mr Khudair is not a shareholder,” Mr Sinfield said. “As it stands, information has been provided to the court proving he is not a director, shareholder, etc,” Mr Sinfield said, adding that the court’s actions do not reflect well on the investment environment.
“I think it could put off foreign investors who feel they might be mistreated in the same way,” said Mr Sinfield, though he declined to say how the injunction had, or would affect his firm.
In the injunction, signed two days after the complaint was filed, it is claimed that Mr Saud owns 80 percent of Cadcomms, and his assets have been frozen due to alleged non-payment of a $343,000 loan from Ms Nala in 2008.
“Temporarily freeze the cash belonging to Saud Ben Khudair, chairman of Cambodia Advance Communications Co Ltd, known by the mobile phone extension 013, that he has deposited in his accounts,” the ruling states.
The injunction also prohibits “Saud Ben Khudair from selling, exchanging, renting, pawning, transferring, donating as a gift or putting into a will his 80 percent share in the company while the court awaits a decision on this case.”
Mr Khudair could not be reached for comment, while the Phnom Penh Municipality Police said he has left the country.
Judge Visal admitted on Friday that the injunction is based solely on information provided by the lender and complainant, Ms Nala.
Judge Visal said he had not verified the lender’s documents yet and expedited the injunction to protect the interests of the lender.
“The court just temporarily decided on the request from the lender in order to ensure the debt is going to be paid. Such a complaint was based on a contract and other relevant documents and if we do not block [Mr Khudair] we would allow damage to the lender,” he said.
Matthew Rendall, a partner at the law firm Sciaroni and Associates, said that under Cambodian law assets can only be frozen if they are directly related to the specific dispute or to settle a debt.
Cambodia’s legal system is a top concern for investors coming into the country, he added.
“I don’t think it’s any secret, the standard of the courts of Cambodia is one of the major considerations as to whether businessmen do or don’t invest in Cambodia,” he said.
“If the court is perceived to be unreliable in properly determining the facts or applying the law, it absolutely lowers the confidence of the investors.”
Contacted Wednesday, Ms Nala said only a portion of the loaned money belonged to her, and the rest belonged to “relatives.” She declined to comment any further.