Seaweed Company Delays Share Sales

By Ros Sothea, VOA Khmer
Original report from Phnom Penh
07 October 2009

A Malaysian seaweed company has delayed a scheme to sell shares to Cambodians after warnings from the Security Commission of Cambodia the plan could be illegal.

FMCB Services, Bhd., has invested around $3 million in its Kampot province facility so far this year, with plans to export seaweed to US, where it can be packaged as food or used in cosmetics. Seaweed is also popular in European, Japanese, Chinese and Korean markets.

“We haven’t sold any shares so far,” Mei Ratha, FMCB’s Cambodian representative, told VOA Khmer. “Now we need to ask the [SCC] first, and we will decide to sell again only if we are allowed to do so.”

The company has 60 hectares of sea area, with a plan to increase to 10,000 hectares, which would demand raising capital between $30 million to $40 million. They had planned to sell shares for $300 per share, with promises of high returns: 30 percent the first year, 50 percent the second year and 75 percent the third year.

Mei Ratha said his company would cancel the sales if they are illegal.

“We need to wait and see,” he said. “If the government allows it and it is legal, we will sell. But if it is illegal, we won’t do it. We’ll forget about it and use our own money instead.”

Soon after FMCB announced the selling of shares, the securities commission, which is responsible for Cambodia’s nascent securities market, took measures to interrupt the process.

“We will invite them to clear out the issue,” said Minh Ban Kosal, secretary-general of the commission. “We will see if it is a desire or confusion.”

Public offerings are so far not legal in Cambodia, he said, and the company does not appear on the business listing of the Ministry of Commerce.

In order to sell shares, companies must be listed on the stock exchange, he said. The exchange is scheduled to open at the end of the year.

A M'sian company dares to sell shares before those of companies belonging to Hun Xen cronies?

Seaweed Company’s Public Offering Illegal: Officials

By Ros Sothea, VOA Khmer
Original report from Phnom Penh
12 August 2009

A Malaysian seaweed company in Kampot province has begun selling public shares to local citizens as a way to raise investment capital, a move the government claims is illegal.

Since early 2009, FMC Services, Bhd., has invested nearly $3 million in growing seaweed on the coast, which sells as foodstuff in Japan, China, Korea, the US and Europe and can be used in cosmetics.

The company had been using about 60 hectares of sea area, but plans to increase that to 10,000 hectares, offering in September unlimited shares at $300 per share, said Mei Ratha, FMC’s Cambodia representative.

Shares could yield an increase in value of 30 percent the first year, 50 percent the second and 75 percent the third, with value doubling in the fourth year, he said, adding that around 400 people are waiting to buy in.

“Don’t wait and see,” Mei Ratha said. “Time is limited. Come and buy shares. It is beneficial. More beneficial than keeping your money with other people.”

However, on learning of the scheme, Minh Ban Kosal, director-general of the Securities Commission of Cambodia, said the public offering was not yet legal in Cambodia.

“If my company wants to sell shares, I can sell them to people I know, but not publicly announce it and ask the public to buy them,” he said.

Cambodia plans to establish a stock exchange at the end of the year, listing between four and 10 companies, but FMC is not among them, he said, adding the commission would immediately look into the offering.

Mei Ratha said he had not asked for permission to sell the shares, denying the company had done anything wrong in seeking to raise capital. The company was not only selling shares in Cambodia, but other countries as well.

Risk of bankruptcy will be insured for shareholders, he said.

Sam Ganty, a stocks expert who sits on the Securities Commission, said the shares were illegal and risky.

“If we buy shares when we know nothing about the company, and the company doesn’t have permission to sell such kind of shares, I think the shares are very risky,” he said.