How relatives and allies of Cambodia’s leader amassed wealth overseas

[geovalin]

Cambodia’s ruling elite are patriots who would never hide money abroad, says the country’s leader, Hun Sen. But a Reuters investigation shows that Hun Sen's family and officials have overseas assets worth tens of millions of dollars, and some have bought themselves European citizenship.

By CLARE BALDWIN and ANDREW RC MARSHALL in NICOSIA, CYPRUS/LONDON

Cambodia’s long-ruling prime minister, Hun Sen, had gathered athletes at his imposing office for a televised pep talk. “I don’t want to mention politics,” he began quietly.

But he couldn’t help himself. It was December 2017. The main opposition party had just been outlawed, the latest move in Hun Sen’s campaign to eradicate his political rivals. The United States and European Union were threatening sanctions, and Hun Sen had a message for them.

“Just do it now if you are brave enough,” he taunted, bristling with outrage. There was no point in the West trying to seize the foreign assets of Cambodian officials, he went on, because they “wouldn’t be so damn stupid as to keep their assets overseas.”

But a Reuters investigation shows that those closest to Hun Sen have done exactly that. Family members and key police, business and political associates have overseas assets worth tens of millions of dollars, and have used their wealth to buy foreign citizenship – a practice Hun Sen has decried as unpatriotic and at times has sought to outlaw.

Among those who have acquired or applied for European Union passports through a citizenship for sale arrangement in Cyprus are: Hun Sen’s niece and her husband, who is Cambodia’s national police chief; the country’s most powerful business couple, who are old family friends; and the finance minister, a long-time Hun Sen adviser.

Photos on social media also show Hun Sen’s relatives enjoying luxurious European lifestyles – boating in Capri, skiing in Verbier, partying in Ibiza – which are at odds with the prime minister’s self-styled image as the humble leader of ordinary Cambodians.

Hun Sen is 67 and has ruled Cambodia with an iron fist for more than three decades. He has jailed or exiled political rivals, shut down media outlets and crushed street protests. Only three men have controlled their countries for longer: the presidents of Equatorial Guinea, Cameroon and the Republic of the Congo. If Hun Sen stepped down tomorrow, Vladimir Putin would have to rule Russia for another 15 years to match his time in power.

Yet challenges remain for Hun Sen. Popular dissatisfaction still simmers, say political analysts. In February, responding to his crackdown, the European Union began a process that could suspend Cambodia’s special trade preferences, potentially damaging industries that employ hundreds of thousands of workers. The country’s political and business elite is on edge, a government insider told Reuters, speaking on condition of anonymity.

“Everyone is making an escape plan,” he said.

Hun Sen’s government didn’t respond to questions from Reuters for this article. Hun Sen’s relatives and associates also chose not to respond, with the exception of one member of the extended family. Hun Panhaboth, the son of another niece, defended his lifestyle in messages sent to Reuters through Facebook. An Instagram photo shows him driving a Mercedes while holding a fistful of banknotes. “I really don’t see the harm in that anyways,” he said.

One Cambodian with overseas assets is the prime minister’s niece, Hun Kimleng. Photos posted on Instagram by a family nanny helped lead Reuters to a posh apartment in central London, situated only a few hundred metres from the palace of the Duke and Duchess of Cambridge.

Hun Kimleng bought the apartment in 2010 for £1.95 million ($2.5 million), according to official property records. It could now be worth at least £3.5 million, estimates the real estate website Zoopla. She also owns a multi-million-dollar apartment in a luxury condo in Singapore, according to the Singapore Land Authority.

In 2016 , she became a citizen of a foreign country: Cyprus.

Hun Sen has frequently denounced his political rivals for obtaining second passports, once declaring them “an escape route from difficulties in Cambodia.” His niece’s Cypriot citizenship is confirmed by a confidential document sent by Cyprus’s Ministry of Interior to its cabinet, which Reuters has seen. Getting a Cypriot passport also makes the niece a citizen of the European Union, which Cyprus joined in 2004. This gives her the right to live, work and travel without visas in 28 EU countries.

Becoming a Cypriot isn’t cheap: It involves an investment of at least €2 million ($2.2 million). Between 2013 and 2018, the country granted citizenship to 3,200 foreigners under its Cyprus Investment Programme, raking in €6.6 billion.
 
The Cyprus interior ministry document confirming Hun Kimleng’s citizenship is dated 21 November 2017. It also recommends that the cabinet grant citizenship to her husband, Neth Savoeun, and two of their grown-up daughters. The cabinet always accepts the ministry’s recommendation, Cyprus’s interior minister told Reuters.

Neth Savoeun is Cambodia’s powerful national police chief, presiding over a force responsible for arresting Hun Sen’s political opponents and violently suppressing anti-government protests. Last year, Human Rights Watch named him as one of 12 generals who form “the backbone of an abusive and authoritarian political regime.” The Cambodian defense ministry called the report “fabricated.” Neth Savoeun is also a senior member of the ruling Cambodian People’s Party.

That the country’s top cop has sought foreign citizenship could show that the party’s leaders are losing faith in each other, said Em Sovannara, an academic and political analyst in Phnom Penh. “It signals fragility in the ruling party,” he told Reuters.

Cambodia’s opposition has repeatedly alleged that Neth Savoeun and his family have foreign citizenship. In August, one opposition leader posted photos on Facebook of what he said were the family’s Cypriot passports. The post seemed to strike a nerve. The next day, the Cambodian National Police issued a statement, saying that Neth Savoeun would never “escape to another country, never betray the nation.”
 
In 2017, the U.S. State Department put Neth Savoeun, Hun Kimleng and their three children on a “visa blacklist” for undermining democracy, according to a U.S. official and another source. This means they can’t travel to the United States unless on official business. The State Department declined to comment.

Cyprus seems less strict. In the confidential document, the Cypriot interior minister urges the cabinet to grant citizenship to Neth Savoeun and two grown-up daughters, and notes that they have never visited Cyprus.

Under Cypriot law, the daughters are eligible for citizenship if they are “financially dependent” on the primary applicant, who in this case is their mother, Hun Kimleng. Yet one of the daughters named in the interior ministry document, Vichhuna Neth, 26, appears to be independently wealthy. In September 2017, three months before the interior ministry’s document was issued, she bought a London apartment near her mother’s, according to British property records. It has two floors and four bedrooms, and cost £5.5 million.

The Cyprus government didn’t respond to a Reuters request for comment about its decision to grant citizenship to Prime Minister Hun Sen’s relatives and allies, including a family blacklisted by the United States. Nor did it respond to questions about its vetting procedure for these prominent Cambodians.

The document detailing the citizenship of Hun Kimleng and her family is part of a tranche of interior ministry documents that Reuters has seen. These detail thousands of applications for Cypriot passports by wealthy foreigners.

The documents take the form of a letter, in which the interior minister summarizes an application for Cypriot citizenship and recommends the cabinet approve it. While the letter mentioning Hun Kimleng confirms she is a Cypriot citizen, the other letters are only recommendations. However, asked if any of his recommendations were rejected by the cabinet, Interior Minister Constantinos Petrides told Reuters: “No . . . Not to my knowledge.”

These documents show that other members of Hun Sen’s inner circle have also received or applied for Cypriot passports. They include Cambodia’s finance minister, Aun Pornmoniroth, a long-time financial adviser to Hun Sen. Aun’s wife also applied.
 
So did two of Hun Sen’s closest and wealthiest allies. Choeung Sopheap and her husband, Lau Ming Kan, created Pheapimex, a giant conglomerate. In a series of reports in the early 2000s, Global Witness, a London-based anti-corruption group, used aerial surveys and field inspections to document years of illegal logging by Pheapimex. Hun Sen has accused Global Witness of telling lies.

Another of Choeung and Lau’s companies was embroiled in the eviction of thousands of families from a development site in Phnom Penh; many of those who protested the evictions were beaten and jailed. Citing the evictions, the World Bank temporarily suspended new lending to Cambodia. Choeung and Lau didn’t respond to Reuters’ questions about their business activities. 

Choeung and Lau are both in their seventies, and their family has business or marriage links to four of Hun Sen’s five children. Lau is a senator for Prime Minister Hun Sen’s party. Choeung sits on the board of the Cambodian Red Cross. She is a close friend of the charity’s president – Hun Sen’s wife.

Choeung and Lau are also close to Cambodia’s security forces. Red envelopes of cash are traditionally handed out as gifts at Chinese New Year, an occasion the couple used to give money to thousands of soldiers, police and Hun Sen bodyguards who gathered outside their mansion in Phnom Penh, according to local media reports. One report quoted the couple’s son saying they had been making the mass donations for nearly a decade.

Choeung and Lau were issued with Cypriot passports in February 2017, Reuters reporting showed. Four of their five children also applied for Cypriot passports in the same year.
 
These prominent Cambodians all sought Cypriot citizenship during a turbulent period when Hun Sen’s grip on power seemed to be faltering. His recent troubles trace back to a general election in 2013. His ruling Cambodian People’s Party had long dominated the polls, but in 2013 it won only 68 of the national assembly’s 123 seats and 48% of the votes. It was Hun Sen’s worst showing in 15 years.

Turmoil ensued. Supporters of a resurgent opposition party spilled onto Phnom Penh’s streets to protest suspected election fraud, and only dispersed after military police opened fire and killed or injured dozens of people. The opposition leader was forced into exile and his successor put under house arrest. The party itself was dissolved.

Other critics were picked off in a wave of arrests and prosecutions, and one was silenced permanently: Kem Ley, a well-known activist, shot dead in broad daylight in July 2016. Police said he was killed by a man he owed money. The man confessed and is serving a life sentence.

The murder had a chilling effect on Cambodia’s embattled opposition. In 2018, with his rivals cowed or silenced, Hun Sen held another general election. This time, his party won 77% of the vote – and every single seat.

The United States called the election “the most significant setback yet” to Cambodian democracy. Hun Sen remained defiant. In a speech at the United Nations in Geneva in July 2019, he said the election had been “free, fair and just,” and called Cambodia a “land of freedom.”

For a wealthy global elite, it’s Cyprus’s freedoms that are appealing. The citizenship for sale programme took off in 2013 after a banking crisis almost wiped out Cyprus’s economy. The country’s economic woes forced it to seek a €10-billion international bailout and scramble to secure other forms of investment. The idea of the Cyprus Investment Programme was “to further encourage Foreign Direct Investment and to attract high net worth individuals to settle and do business in Cyprus,” according to the Ministry of Interior’s website.

Each applicant must invest at least €2 million in Cyprus. At least €500,000 must be invested permanently in property. The remainder can be invested in Cypriot companies, and need only be parked there temporarily. At no point in the application process is the applicant compelled to live in – or even visit – Cyprus.

A backlash against the scheme has grown. Some conservationists and other critics say it has fueled a property boom that has priced out ordinary Cypriots and harmed the environment. In a January report, the European Commission warned that what it called “golden passports” could help organised crime groups infiltrate Europe and raised the risk of money laundering, corruption and tax evasion.

The Cypriot government denied this, but has also tweaked the programme. Since May, applicants must keep the bulk of their investment in Cyprus for five years instead of three. They must also pay up to €150,000 to state agencies tasked with fostering innovation and building affordable homes. Some critics dismiss these measures as cosmetic, and are calling for more public scrutiny of who is applying, where their money comes from and who benefits from it in Cyprus. The government has resisted.

The Mediterranean resort town of Paphos is a two-hour drive from the capital. The highways and roads leading there are flanked by billboards erected by property developers and aimed at foreigners looking for residency or citizenship. “Invest in Cyprus, enjoy its benefits,” says one, in English and Chinese. On Paphos’s beaches, tourists sprawl across the burning sand or cool down in the Med’s azure shallows.

Not far inland, on the top floor of a Paphos low-rise, is a family law firm called Andreas Demetriades & Co. Between January 2013 and August 2018, its modest office processed 137 “citizenship by investment” applications worth hundreds of millions of euros to Cyprus.

This is according to a document from Cyprus’s interior ministry, which was shared with the country’s parliament and seen by Reuters. The company that has processed the most applications is the giant accounting firm, PricewaterhouseCoopers; it handled 184 applications during that period with what PwC Cyprus calls “robust client screening and acceptance processes.”

Andreas Demetriades & Co. was second. Demetris Demetriades, a senior partner, said the firm had processed “hundreds” of applications, but declined to confirm the interior ministry’s tally of 137 or talk about specific clients. Reuters reporting shows that his firm handled the applications of the Cambodian finance minister, Aun; the leading business couple, Choeung and Lau; and their family members.
 
Demetriades said most of his clients were “savvy investors” who wanted a Cypriot passport that gave them the freedoms of a European national. For some, the passport was also “an insurance policy.”

“Let’s admit it,” he said. “There are countries which have political instability – where people feel that their families and their business interests are in jeopardy. So it’s good for them to have something to fall back on should the worst happen.”

Demetriades said some of his clients were so-called “politically exposed persons” – people whose prominent positions in government or public life might make them vulnerable to corruption. “That doesn’t mean that they’re bad people,” he said. “It just means that you have to investigate further their source of funds.”

Where those funds end up in Cyprus is also hard to track. Business and property databases in Cyprus are often out of date, incomplete or closed to public access. But Reuters reporting turned up a company that served as an investment vehicle for foreigners seeking citizenship, including five of the Cambodians.

The company, called JWPegasus, was incorporated in Cyprus in May 2015 to help fund the construction of a Radisson Blu hotel in Larnaca, the country’s third-largest city.

A Reuters analysis showed that at least 22 of JWPegasus’ 26 shareholders have applied for Cypriot passports. Twenty of them applied through Andreas Demetriades & Co., the law firm. The five Cambodians among them include: Choeung; two of her children and the wife of Aun, the finance minister. Each invested at least €2 million.

JWPegasus described itself to Reuters as a “solid company” that has created hundreds of jobs. JWPegasus declined to comment on individual investors but said that, to its knowledge, none of them had “any illegal activities.” Radisson Blu said that its due diligence, carried out before doing business with JWPegasus, “did not reveal any suspicious activity at that time.”

Demetris Demetriades said he knew of JWPegasus but stressed that his law firm had no connection to it. He said he didn’t tell his clients which companies to invest in because his firm also did due diligence on those companies, which could create a conflict of interest. “Caesar's wife must not only be honest, but must also look honest,” he said.

For some members of Cambodia’s elite, Cypriot passports are trappings of luxurious lifestyles that could undermine Prime Minister Hun Sen’s self-styled image as the humble leader of a party representing ordinary Cambodians.

Wealth is a touchy subject in Cambodia. The Asian Development Bank estimates that 70% of people live on about $3 a day, and Hun Sen has long projected himself as a leader who suffers alongside his poorest compatriots. Speaking at a factory near Phnom Penh in February, he said he didn’t have a second nationality or a house abroad, and chose instead “to eat grass with the Cambodian people.”

Yet many relatives with the Hun family name flaunt their wealth on social media accounts. One photo on Instagram shows two of the prime minister’s nieces, Hun Kimleng and Hun Chantha, posing in ballgowns and matching golden necklaces. Other photos document their near-constant travel, often by private jet, to fashion shows in Paris, a hillside villa in Mykonos, and London nightclubs like Loulou’s. Hun Chantha also co-owns London apartments worth £5 million, property records show.

Hun Panhaboth, the son of another niece, gave his girlfriend a Mercedes-Benz for her birthday, according to photos on Facebook. Most Cambodians were “happy and congratulated us,” Hun Panhaboth told Reuters. “I don't think this gift makes Prime Minister Hun Sen look bad in any shape or form.”

And while the prime minister spoke about eating grass, Instagram showed some relatives feasting on caviar in London. Among them was Hun Kimleng’s wealthy young daughter, Vichhuna Neth. She applied for Cypriot citizenship in November 2017. Four months later, she posted photos and videos on Instagram from western Cyprus. They show her driving a dune buggy along a coastal road and reclining in an open-air jacuzzi at a luxury villa.
“Cyprus,” she gushed, “you’ve been AMAZING!!”

-- REUTERS

[yellowboat]

How do you say: "hand caught in the cookie jar" in Khmer?   It would be shocking if they did not sock away millions overseas.  Sad but not astonishing in the least. 

[Baerboxer]

38 minutes ago, yellowboat said:

How do you say: "hand caught in the cookie jar" in Khmer?   It would be shocking if they did not sock away millions overseas.  Sad but not astonishing in the least. 

 

What's really shocking, and again sadly not surprising, is the complicity of Banks and some states in this. No questions about source of funds, and citizenship up for sale as long as you've got the money. 

[PatOngo]

I doubt Hun Sen would have ever come to power if it wasn't for....

 

[fxe1200]

20 minutes ago, Baerboxer said:

 

What's really shocking, and again sadly not surprising, is the complicity of Banks and some states in this. No questions about source of funds, and citizenship up for sale as long as you've got the money. 

Money talks and bs walks. No difference to Thailand.

Edited October 17, 2019 by fxe1200

[phycokiller]

pretty obvious with the amount of foreign aid and UN help coming in and the fact that there is still no free education or health care meaning that families have to prostitute their daughters to educate their kids and take them to the doctor, that the money was going somewhere else

[spidermike007]

Cambodia’s ruling elite are patriots who would never hide money abroad, says the country’s leader, Hun Sen. But a Reuters investigation shows that Hun Sen's family and officials have overseas assets worth tens of millions of dollars, and some have bought themselves European citizenship.

 

Absolutely wrong. It is into the billions of dollars. They extract tens of millions every month or two. Hun Sen has been doing this for over 30 years, and is one of the most corrupt men on earth. He is a boil on the face of that nation. A serial killing, thieving despot.