Thousands of Lao Nationals Duped by Asianface Company
Owner of Asianface Company, Cambodian investor Mr Hout Sovanh, was arrested earlier this week after numerous investors bombarded his office in Vientiane on Monday, demanding that their investments in a joint venture be returned.
The owner of Asianface Company Ltd has been accused of failing to pay dividends to his investors as agreed upon and had previously guaranteed to refund investor money, but ultimately never did.
Asianface was established in June 2015, and was legally licensed as a consultant firm to give advice on business establishment and operations, however the owner has been caught moving funds to do business in real estate.
Mr Hout has allegedly mobilised members of the population to invest in his real estate business, which violates the relevant Lao laws and regulations.
By enticing members of the public with the promise of a high, nine percent return per month, the company has seduced scores of investors within a short period of time.
According to the official of the Enterprise Registration and Management Department, the company has been warned by the department to cease and desist its illicit activity.
Those who invested explained that in mobilising capital, the company would inform them that its investment would involve developing properties such as condominiums, hospitals, markets and schools.
The company also develops and allocates land, in which land use rights are owned by the company, and encouraged people to invest at a special price.
Along with the 9 percent monthly dividend, the company touted additional incentives, including free package tours to foreign countries.
More than US$12 million has been contributed by an estimated 10,000 people, with personal contributions starting at US$1,000.
Originally, the company followed through on their promises, paying dividends to all its investors, up until August of 2016.
However, since the company has suffered financially, new investors have not seen any dividends at all.
The company had previously issued an announcement informing all investors it could no longer accept new shareholders, due to the government’s prohibition.
Investors were notified a short while later that the company would no longer be paying dividends and those who intended to withdraw their money could do so on January 15, 2017 along with an additional 20 percent interest.
Those who opted to continue in the joint the venture would be paid their dividends every six months instead of monthly and those who wanted land, in which land use rights are owned by the company, could also choose so instead of taking cash.
On January 15th of this year, numerous frustrated investors sat and waited in the company’s office in Phontongchommany Village, in the Chanthabouly District, anticipating to withdraw their money from the venture.
However, according to an infuriated investor, no money was returned as promised.
Taking into account the complaints of scorned investors, authorities intervened, resulting in the signing of an agreement on January 18, 2017 in which the company pledged to return all funds to the investors by March 27, 2017.
In fears that tensions will magnify, district police have decided to keep Mr Hout in custody.
Security, industry and commerce officials overseeing the issue said that it was in the process of being reported to higher authorities to seek further guidance in resolving the matter. However, an official of the Cambodian Embassy to Vientiane has already been notified.
More than 20 companies have illegally raised funds from members of the public, government spokesman Prof Dr Chaleun Yiapaoher said recently, citing a report from the Central Bank presented to the National Assembly.
The government has instructed a proper investigation into the issue to seek a solution.