On Tuesday, September 12th, two senior executives of PS Lao Enterprise were taken into police custody following a heated dispute between the company’s co-presidents, Ms Souknaly Thepsimeuang and Mr Porher, and an angry swarm of shareholders demanding their investments be returned. It is currently unclear whether the duo were placed under arrest by authorities, or were just escorted off the premises by police in an attempt to deescalate the highly-tense situation.
As previously reported by The Laotian Times, PS Lao Enterprise is a company that produces food items such as meat, fish, rice, drinking water and is an importer of various grocery and consumer products in Laos.
However, the company came under fire in September, 2016 when the Bank of Lao PDR issued a warning to the enterprise to cease mobilizing funds from the public, and to return all investments made. The company denied the accusation and responded that no such activity existed.
Officially registered as PS-Agriculture and Industry Development Import and Export Co., LTD. in 2012, the corporation sourced funds in the same way as a public company or a bank, which is a violation of Lao law. As a limited private company, sourcing capital to operate a business is the responsibility of the investor.
The company accumulated massive sums of money from approximately 30,000 depositors, encouraging participants to invest anywhere from 500,000 LAK to 1 billion LAK. Investors were initially promised a high monthly dividend of 6%, but over time that number was reduced to 4.8%, then to 2%, and eventually shareholders stopped receiving interest from the firm completely. Some claim that 24% bonuses were extended to those who maintained their deposits for a year.
After investors stopped seeing dividends, the majority of shareholders wanted to withdraw their investments. In April, 2017 Ms Souknaly addressed the people’s request by saying the company was happy to refund anyone who wanted to part ways.
However, since the funds were not readily available, Ms Souknaly informed those who wanted to rescind their investments to notify the corporation officially of their intention to withdraw the money and then wait 3 months for products to be sold before a refund could be issued.
She also gave business partners a second alternative, encouraging investors to opt for marketing the company’s products themselves in correlation to the amount they had invested.
In June, the Bank of Lao PDR issued a final warning to PS Lao Enterprise instructing them to return all funds to investors by July, 7th or be reprimanded. The company was also required to submit daily progress reports of repayments to the central bank leading up to the deadline, however an official with the bank confirmed no reports were ever received.
On Monday, two months after the set deadline, hundreds of angry investors bombarded the PS Lao Enterprise office demanding answers.
After a meeting between board members and shareholders ended in a stalemate, a mob consisting of over 1000 members returned on Tuesday with fury.
As tensions escalated amongst the crowd, law enforcement intervened and Ms Souknaly and Mr Porher were lead away in a dark police van.
A special task force committee assembled by the government earlier in the year to address the matter, convened with shareholders after the executives were detained.
The meeting produced an agreement to include representatives for the investors on the special committee, so that the investors will have a chance to participate in finding an acceptable solution.
An official has announced that the authorities in charge have previously submitted a report about the issue to higher authorities along with recommended solutions, but declined to comment further on the proposed solutions, stating that they are now waiting for guidance from higher authorities before taking the next steps.