Cambodian court finds against Thaicom unit

Orders payment of $3.7m outstanding debt 

Published: 5/11/2012 
Bangkok Post 
Writer: Philip Heijmans 

PHNOM PENH : A Norwegian company has won a court injunction against Mfone, the Cambodian mobile subsidiary of the SET-listed satellite operator Thaicom Plc, for failure to pay US$3.73 million in service charges, court documents show. The ruling by the Phnom Penh Municipal Court in favour of the energy company Eltek Valere comes as two other Cambodian mobile operators _ Hello Axiata Co Ltd and Latelz Co Ltd _ have threatened to sue Mfone unless it repays hundreds of thousands of dollars it allegedly owes them in interconnection fees.

"Mfone did not complete or implement its contract with Eltek, because until now the company did not pay for the equipment needed for its GSM network," the complaint filed by Eltek on Oct 9 said.

"Despite this, [Eltek] tried to negotiate with the firm and many times informed them of the debt through their lawyer, but Mfone has not agreed to pay and even used tricks to delay talks many times until Eltek could not take it anymore."

After reviewing Eltek's complaint, the Phnom Penh Municipal Court on Oct 18 ordered Mfone to provide the court with an assessment of its inventory and also banned the company from selling any of its assets until the situation with Eltek is resolved.

"The Phnom Penh Municipal Court decided to issue these warrants based on the case provided by the plaintiff," said the injunction, which was signed by presiding Phnom Penh Municipal Court Judge Sin Visal.

In work that was completed in 2009, Eltek helped Mfone to develop its satellite technology for its mobile network, according to the complaint filed by Eltek.

Eltek's complaint also cited a letter signed by former Mfone chief executive Yap Wai Khee on Sept 5, 2011, addressed to Eltek's head office in Singapore, stating the firm was unable to make the payment due to an ongoing restructuring of Mfone's debt in Cambodia.

The letter also suggested paying monthly instalments of $10,000.

Thaicom has publicly stated on several occasions this year its intent to sell Mfone.

And in May, Thaicom made the decision to reduce the company's registered capital by $1.31 million.

Thaicom's first-half financial statement showed Mfone's net profit dropped by 50% year-on-year to $1.34 million.

Kouy Thunna, the lawyer representing Eltek, said Mfone has one month from when the injunction was issued to pay up before Eltek decides whether to file a lawsuit.

"I have already discussed it with the ownership [at the regional office] in Singapore, and they decided that they will file a complaint with the court to seize the property of Mfone in order to pay back the debt, but we'll give them a little more time," he said.

Atip Rittaporn, managing director of Shenington Investments Pte Ltd, the holding company for Mfone, said he is aware of the injunction but is uncertain about how the firm will proceed.

Ken Streutker, Thaicom's assistant vice-president for investor relations, said Shenington has appealed the injunction.

"We continue in our efforts to find a suitable business solution for Mfone's operations. We do not expect the injunction to affect these efforts," he said.

Posts and Telecommunications Minister So Khun said the government would not intervene in the many financial troubles facing mobile operators in Cambodia.

"I know some firms are having pro blems in court, but I think they just need to fight it out with one another," he said.