Source: http://www.sea-globe.com/Business/outlook-gloomy-camko-city-phnom-penh-cambodia.html Thursday, December 08, 2011 – by SEA Globe
“Three kilometres north of Phnom Penh and ringed by a newly paved road, Camko City squats incongruously among muddy shrubs and buried garbage on the shore of Pong Peav Lake.
The $2-billion project, developed by World City Co Ltd, stands barren and unfinished, deadlines waylaid by a series of financial scandals that have rocked Busan Savings Bank, its primary financial backer.
Last month, the majority of its shareholders charged South Korea’s Busan with financial corruption of more than $7.9 billion in illegal lending and accounting fraud.
Now the future of Camko City, hailed as the ‘Miracle of the Mekong River’, seems more uncertain than ever.
Allegedly the bank, whose activities are now suspended, illegally used its customers’ private savings to run a series of speculative businesses, such as the construction of apartments and resorts.
More than 70 of its executives face trial.
According to the prosecutors, Busan would have invested $459m in Camko City through nine different shell companies.
The National Bank of Cambodia has launched an investigation into Camko Bank, an institution of which Busan is a major shareholder and which provides loans to customers buying property in Camko City.
While the probe has yet to produce any irregularities, it has raised questions regarding Cambodia’s background checks and opaque process of allocating business licences.”