UPDATE - Report claims PM, family at centre of Cambodia graft

UPDATES TO EDIT THROUGHOUT

By Lauren Crothers

PHNOM PENH, Cambodia (AA) - Cambodia's prime minister and his extended family have established a network of businesses that have enabled members to benefit from corruption, land grabs and even a $1-billion drugs empire, a new report has claimed.

An investigation carried out over the past year and published Thursday by Global Witness has exposed a “huge network of secret deal-making and corruption that has underpinned Hun Sen’s 30-year dictatorial reign of murder, torture and the imprisonment of his political opponents”.

The report, Hostile Takeover, says that contrary to claims he is doing his best to clean house, “Hun Sen and his associates are at the heart of the graft, personally benefiting from grand corruption at the expense of Cambodia’s citizens.”

Investigators for the report by the research and advocacy group said they had mined through the data of thousands of companies to which the government has recently restricted access.

The known value of the Hun business empire amounts to about $200 million, but its true value is thought to be significantly higher, because “they are said to obscure their commercial interests behind fake names and within shell companies.”

The investigation found that “the domestic companies they are affiliated to have been accused of a litany of abuses, including the theft of land and natural resources, violence and intimidation against local populations and environmental devastation.”

The network has become intrinsically linked with Cambodia’s economy; so much so that it would be difficult to avoid paying into it on a day-by-day basis, according to Global Witness. The family is linked to a number of international brands that include Apple, Honda, Visa and Unilever.

“The Hun family includes members once implicated in a $1-billion heroin smuggling operation, shoot-outs, a fatal hit-and-run, and land grabs that have caused mass displacements and destitution among Cambodia’s rural poor,” the report alleged, noting that family members “hold key posts in politics, the military, police, media, and charities -- sectors that prop up Hun Sen’s party through propaganda, political donations or brute force.”

In 2012, the Age newspaper cited an Australian police report in which Hun Sen’s nephew, Hun To, was suspected of being part of a billion-dollar drug ring.

Hun To denies the allegations.

Global Witness board member Stephen Peel, a former senior partner at private equity firm TPG Capital, said investors should ensure that the money they put into Cambodia does not end up contributing to the country’s corruption problems.

He added that “doing business with companies that are owned or controlled by the country’s ruling family not only raises ethical questions, it also carries significant legal, financial and reputational risk.”

Of Hun Sen's 27 family members contacted for comment by Global Witness, only Sok Puthyvuth, the husband of Hun Sen’s youngest daughter, Hun Maly, responded.

In his email, he described living “in the shadows of my family”.

In excerpts of his response, provided by Global Witness, Puthyvuth said he saw “many issues and many obvious solutions, but I have seen again and again that the good solutions are seldom implemented correctly”.

“I can understand your assumption that I have abused my power to get to where I am today, but I can assure you that I take seriously the challenge of building a responsible and respected private sector group,” Puthyvuth said, adding, “it is a work in progress.”

Contacted by phone Wednesday, Council of Ministers spokesman Phay Siphan told Anadolu Agency he had “decided to no longer engage with explanations on that report”.

He accused Brad Adams, Asia director of Human Rights Watch, of “organizing the opposition against Cambodia”, and also spoke of his “shock” at reading a recent report on the human rights situation in Saudi Arabia.

Pressed on the Global Witness report specifically, however, Siphan said: “No matter how I explain it, it doesn’t help. Their intention is to topple the prime minister. I’m not his lawyer or his family's lawyer."

"It's too personal and not in the interest of the public,” he added.