Another govt monopoly contract for Hun Sen’s crony Kith Meng

Private company for VIPs transport (limousine service)

24 March 2009
By Im Navin
Cambodge Soir Hebdo
Translated from French by Luc Sâr
Click here to read the article in French

Kith Meng and the government, through Keat Chhon, the minister of Economy, have signed an agreement on Monday 23 March to provide a 15-year VIPs transport (limousine service) monopoly to the Royal Group company led by Kith Meng.

The Royal Group now owns 40 vehicles and it employs personnel trained in driving VIP convoys. If the government need will be higher, the Royal Group can gather up to about 100 vehicles.

According to the terms of this agreement, private company and NGO officials could also need to use this service.

Yim Sovann, SRP spokesman, is in disagreement with this project: “The government must ensure this VIP transport by itself, otherwise, the government must allow competition to take place between several private companies.”

Developer Has ‘Dream’ Plans for Island

Koh Rong could see millions of dollars in infrastructure development, as a Phnom Penh developer eyes the island.

By Vohar Cheat, VOA Khmer
Original report from Sihanoukville
12 November 2008

A Phnom Penh developer hopes to bring $200 million in infrastructure before investing in a resort on the island of Koh Rong, one of Sihanoukville's poorest administrative areas, which is currently cut off from the mainland and lacking many services.

The Phnom Penh company Royal Group has signed a 99-year lease agreement with the government to develop Koh Rong, with a total expected budget of $2 billion.

Jacov Montross, business and finance manager of Royal Group, said the company plans to spend as much as $200 million on road construction, sewage systems, air and sea ports, clean water, electric power and village infrastructure.

"Before any hotels or casinos or that kind of thing is put on the island, the infrastructure needs to be put on the island first," he said. "We would like to see the infrastructure start to go on the island within the next six months."

Currently, only a handful of tourists visit the remote island each day.

Montross said infrastructure development could take up to 20 years to finish, after which Royal Group plans dozens of hotels and casinos, a golf course and an airport large enough to handle Boeing 737s and direct flights from China, Japan and India.

A first-class hospital will need to be built for tourists, and islanders could be trained in hospitality and tourism. In all, the project could employ 120,000 people.

Duch Sokhom, chief of Koh Rong commune, implored the employment of the island's many fishermen, who are facing "devastating" shortages of marine life.

Montross said priority would be given to the islanders, especially for infrastructure construction. Better jobs would be available in the future, he said, but people must be trained.

Sok Phon, chief of cabinet for Sihanoukville, said that besides Koh Rong, other islands are being developed, such as Koh Puos and Koh Dekol. Sihanoukville administration encompasses the increasingly popular coastal town and 22 islands.

Royal Group is still looking for outside investors.

"Right now it is a dream," Montross said. "It is a dream that we would like to make into reality."

From Pol Pot to pot of gold [or how an exploited becomes an exploiter by becoming one of Hun Sen's cronies]

August 28, 2008
WA Today (Australia)

Kith Meng grew up in Australia as an orphan and a refugee from Cambodia's genocide. He tells of washing dishes and mowing lawns to make ends meet while living in Canberra. Being a poor oUSder made him stronger, he says, and unusually driven.

Now, back in Cambodia since 1991, the 39-year-old has built his Royal Group into an empire that owns Cambodia's biggest mobile phone company and television network and is developing a $US2 billion ($2.3 billion) resort and casino on a fishermen's island on Cambodia's coast. The country's most successful businessman, he supports Prime Minister Hun Sen and benefits from his ties to the government, which granted the 99-year lease on the island for his resort. He is a Neak Oknha, an honor the royal family confers on a few of the wealthiest members of society.

Thousands of former refugees, with their own harrowing stories, have returned to Cambodia, and now investors hoping to profit in the next frontier market -- a term Standard & Poor's coined for economies smaller or less developed than traditional emerging markets -- are coming to the country, too.

The entrepreneurial drive and technical skills the returnees bring with them from overseas are breathing life into the economy. Three decades after Pol Pot exterminated the country's educated classes and emptied its cities, Cambodia's gross domestic product is just $US8 billion a year.

''Suffering is my mentor,'' says Kith Meng, who fled the terror, first to a refugee camp in Thailand and then, in 1981, to Australia. Black-and-white photographs of his parents adorn one wall of his office in the capital city of Phnom Penh. They starved to death during Pol Pot's reign, when Cambodia's fertile countryside became the killing fields. They were two victims among the 1.7 million, or 20% of the population, who perished.

Political and business leaders are grappling with poverty, inadequate health care, poor education and a lack of roads in this nation of 14 million. Corruption is slowing progress, says Joseph MUSmeli, the US ambassador.

``The trick with a frontier market is getting the timing right,'' says Douglas Clayton, who founded Leopard Cambodia Fund LP last year and is raising $US100 million to invest in real estate, banking and agribusiness. ''Cambodia is really a discovery story -- and it's being discovered.''

Growth spurt

Cambodia grew 9.5% a year from 2000 to 2007, the fastest pace in Asia after China, which expanded 9.9% a year. Political stability under the administration of Hun Sen, 56, has helped the Cambodian economy take off, says Bretton Sciaroni, chairman of the American Cambodian Business Council in Phnom Penh.

Hun Sen has run the country since 1985. He came to prominence as a communist while the Vietnamese occupied the country, having pushed Pol Pot's Khmer Rouge from the capital. He strengthened his grip with a landslide victory for his Cambodian People's Party in July's parliamentary elections. An opposition leader has alleged manipulation of voter rolls, and the royalist party that shared power in the 1990s has been reduced to two seats in the legislature.

Clothing exports and tourism have buoyed the tiny economy, though the revenue of any of the world's 500 largest companies would still dwarf Cambodia's annual economic output.

A 1994 law to open the country to foreign investors has encouraged some to put money in. Approved foreign direct investment rose to a record $US4.4 billion in 2006, according to the Cambodian Investment Board. Investors can own 100% of a company, and they face no restrictions on taking money in and out of the country -- in contrast to China or Vietnam.

Still, the business council's Sciaroni, a former lawyer at the White House under President Ronald Reagan, says perceptions of Cambodia have not caught up to the changes. In May, a US State Department official inquired on behalf of an executive if it would be safe to visit Siem Reap, home to Angkor Wat, the five-towered archaeological wonder.

''He wanted to know about bandits and land mines,'' he says. ''I said this is ancient history.''

Risk perceptions

If Cambodia is about to take off on the same trajectory as Vietnam to its east or Thailand on its western border, the time to get in is now, says Robert Ash, a former executive at the asset management arm of insurer American International Group Inc.

''Where the perceived risks are greater than actual risks, investment opportunities are the result,'' Ash says. ``Such is the case of Cambodia.''

Investors familiar with Thailand and Vietnam have been among the first to spot the changes taking place in Cambodia.

''In the past, when you went to a dinner party here, everybody would be talking about politics,'' says Leopard's Clayton, 47, who used to run the Thailand office of CLSA Securities, a Hong Kong- based brokerage. ``Last year, when I came, nobody was talking about politics. Everyone was talking about property, investments, deals, like everywhere else in the world.''

[Kith Meng's] Royal to raise $2bn to develop island

August 17 2008
By Raphael Minder in Hong Kong
Financial Times (UK)

Royal Group, a Cambodian conglomerate whose interests range from banking to mobile telephony, is raising $2bn from private investors, together with Hong Kong-based Millennium Group, to develop Koh Rong, an island off Sihanoukville, Cambodia’s only deep-water port.

The move comes as property developers are planning billion-dollar investments to transform Cambodia’s coastline into one of Asia’s leading holiday destinations.

Such investments are designed to help diversify a Cambodian tourism industry that is heavily reliant on Angkor Wat and the country’s other inland historic treasures.

The amount planned by Royal will only cover the initial stages of the development, according to Mark Hanna, chief financial officer of Royal Group.

“We are talking about an island that is the same size as Hong Kong island, where we want to add things such as an airport, so ultimately we are certainly looking at several billions,” he told the Financial Times.

Meanwhile, MPDI, a subsidiary of Seng Enterprise, a family-owned group that is one of Cambodia’s leading construction companies, is working on another $2bn project, with unnamed US, Japanese and Middle Eastern investors. The project will triple the size of Kep, a neglected former French colonial resort

Seng’s plan involves reclaiming land along a 6km stretch of coastline and building luxury towers and bungalows. that will be able to house about 10,000 families.

They also include Preah Vihear, another temple that straddles the border with Thailand and whose disputed ownership has threatened to spark a military conflict between the two countries.

After decades of war and genocide overseen by the Khmer Rouge regime, Cambodia is playing catch-up to other south-east Asian tourism hotspots in countries such as Thailand and Malaysia.

In the 15 years since Cambodia’s return to multiparty democracy, the country has made an impressive economic recovery and tourism has grown almost tenfold to become the second most important sector after textiles. The number of visitors to Cambodia breached 2m for the first time last year, but of those only 122,000 visited the country’s beaches.

Vantha Seng, chief financial officer of Seng Enterprise, said construction in Kep was likely to start next year, thanks to a first round of financing of about $250m, with contributions from “well-known” Japanese, American and Middle Eastern funds and private equity firms.

She said the project could become Cambodia’s first offshore listing, either on the Hong Kong or Korean stock exchange. As to the targeted clientele, the developers are betting particularly on wealthy Asian pensioners from Singapore, South Korea and Japan. Some of the housing will also be reserved for Cambodians.

“We already have some bookings and it’s mainly from people under 50 who are preparing their retirement plans,” she said. “Thailand has shown how you can develop beautiful beaches but we also want to avoid some of the mistakes there and certainly want to remain upmarket.”

Pizza Hut follows KFC to Cambodia

Malaysian group gets rights to open Pizza Huts in Cambodia

Aug 8, 2008
DPA

Kuala Lumpur - Malaysian restaurant operator QSR Brands Bhd has obtained rights to operate outlets of the fast-food chain Pizza Hut in Cambodia, a news report said Friday.

The company, which opened the first KFC fast-food chicken outlet in Cambodia on March 2, obtained approval from the international restaurant company Yum Restaurants Asia Pte Ltd to open the Pizza Huts, The Edge Daily, a Malaysian financial newspaper, reported.

KFC is currently being operated via Kampuchea Food Corp Co Ltd, a joint venture of QSR, Royal Group of Companies and Rightlink Corp Ltd, the report said.

The company said a new wholly owned subsidiary would be set up under the joint venture to undertake Pizza Hut operations in Cambodia.

Cambodia to Open Bourse in 2009; Urges Corporate Transparency

By Netty Ismail and Yoolim Lee

July 24 (Bloomberg) -- Cambodia plans to open its first stock exchange and start a corporate bond market in the fourth quarter of 2009 in a bid to attract foreign funds to Southeast Asia's second-poorest nation, a government official said.

Six to 10 companies, with a combined market value of $200 million to $400 million, including Sokimex Group, the country's biggest petroleum company, and Acleda Bank Plc, its largest bank, will likely be listed on the exchange within a year of it being set up, Kao Thach, head of the Ministry of Economy and Finance's financial market division, said late yesterday.

Cambodia, which abolished money under the Khmer Rouge three decades ago, is seeking to lure foreign funds as economic growth slows after peaking at 13.5 percent in 2005. The government will need to improve the legal system and urge Cambodian companies to open their accounting records to investor scrutiny, said Agost Benard, who covers the country for Standard & Poor's.

``Given all the uncertainties and lack of transparency, at least initially, it will probably be the local people who are willing to take the punt,'' said Benard, associate director at the rating company in Singapore. ``International investors who expect higher standards of disclosure and transparency will take a wait-and-see attitude.''

The government last year asked more than 400 companies, most of which are family businesses, to get their financial statements audited to improve transparency, Thach, 34, said in an interview in Phnom Penh.

Local Rules

``Cambodia has been effectively cut off from the rest of the developed world for the past three decades, so a lot of business has been done based on unwritten local rules,'' said Marvin Yeo, co-founder of Frontier Investment & Development Partners in Phnom Penh.

Frontier Investment, a private-equity fund, is raising $250 million to put in the second-poorest of 10 Southeast Asian nations, and will cash out of some of its planned investments through listings on the exchange, Yeo said.

The listing requirements in Cambodia will likely be modeled on the Kosdaq, South Korea's second stock market that was set up 12 years ago for small- and medium-sized firms as well as venture start-ups, Thach said.

Companies seeking a Kosdaq listing need to be in business for at least three years with minimum paid-in capital of 500 million won ($495,417) and debt-to-equity ratio of less than 150 percent of the industry mean. Venture capital firms have less stringent requirements under the South Korean government's program to prop up smaller technology companies.

Raising Capital

South Korea's exchange is helping Cambodia set up its bourse. The Cambodian government, which will likely own at least 51 percent of the planned venture, and the operator of the Seoul-based bourse, Korea Exchange Inc., will begin discussions next month to decide on their shareholdings, Thach said.

The Cambodia Securities and Exchange Commission will likely be set up as early as September, Thach said.

``They're nowhere near getting the rules together, the criteria for listing, transparency, proper accounting,'' said John Brinsden, vice chairman of Acleda Bank, the largest Cambodian bank with 209 branches in 24 provinces.

Acleda Bank will ``need a lot of capital over the next few years'' as it opens more offices in Cambodia and neighboring countries including Laos, Brinsden said in Phnom Penh.

Sokimex, which has monopoly rights to ticket sales at the Angkor Wat ancient temple ruins in Siem Reap, plans to expand its hotel and resorts business, Chief Executive Officer Sok Kong said on the company's Web site.

Transparency Concerns

Other Cambodian companies considering initial public offerings include Canadia Bank Plc, Union Commercial Bank Plc and Mong Rithy Group, which has palm oil plantations in Sihanoukville, Thach said.

Royal Group, which owns the country's biggest mobile-phone operator and has a partnership with Australia & New Zealand Banking Group Ltd. in Cambodia, will consider a listing ``in the future,'' Chairman Kith Meng said in an interview in Phnom Penh.

Companies can sell shares or bonds in Cambodia's currency, the riel, or the dollar, which will mitigate any foreign exchange risk for international investors, Thach said.

Still, ``the biggest concern would be the credibility of the companies or their reporting standards,'' said Frontier Investment's Yeo. Transparency International, a private monitoring agency based in Berlin, ranked Cambodia 162nd of 179 countries in its annual report on perceptions of corruption last year.

To contact the reporter on this story: Netty Ismail in Singapore
nismail3@bloomberg.net.

Royal Group Seeks $2 Billion to Build Cambodian Island Resort

Kith Meng on the cover of the Forbes magazine.

By Netty Ismail

July 10 (Bloomberg) -- Royal Group, which owns Cambodia's biggest mobile-phone operator, plans to raise as much as $2 billion with Hong Kong-based Millennium Group to build resorts, casinos and an airport on an island off the coast of Cambodia.

Royal Group and the Millennium real-estate investment firm are seeking investors and partners for resorts, apartments, casinos, golf courses, polo fields and an airport on Koh Rong island, according to a financing investment document obtained by Bloomberg News. The island is the largest of 22 off the coast of the southern port city and beach resort town of Sihanoukville.

``This is a place that people haven't discovered yet,'' said Royal Group Chairman Kith Meng in an interview in Phnom Penh. ``It's like the Maldives,'' an island country in the Indian Ocean southwest of Sri Lanka, he said.

Cambodia, the second-poorest of 10 Southeast Asian nations, is relying on tourism to fuel economic growth as garment exports slow. The country attracted about $400 million of tourism-related investments in the first half of 2008, mostly for resorts, Commerce Minister Cham Prasidh said. Visitors to Cambodia exceeded 2 million for the first time last year, up from 118,183 in 1993 when Cambodia emerged from a two-decade civil war.

``Our dream is to transform our costal line into the next Riviera of Asia,'' Cham Prasidh said in a July 4 interview. ``There'll be plenty of resorts appearing on the islands and all along the coast of Cambodia. There will be billions of dollars of investment in that sector this year and next year.''

Angkor Wat

The companies will raise funds from investors in London and the Middle East, and it will take 10 years to 15 years to develop the island, said Kith Meng on July 4.

Cambodia wants to develop tourism beyond the key destination of Angkor Wat, known for its ancient temples. The island project may face competition with beach resorts also being developed in Vietnam and Thailand.

``The tourism industry is overwhelmingly concentrated on Angkor Wat because of the unique attraction you can't find elsewhere in the world,'' said Agost Benard, associate director at Standard & Poor's in Singapore. ``As far as developing a beach resort, you'll be competing with a lot of countries because it's a generic product.''

Royal Group and Millennium are raising funds as record oil prices prompt airlines to cut flights. Cathay Pacific Airways Ltd., Hong Kong's largest airline, said July 2 that earnings would be ``disappointing'' because of record fuel costs.

``I don't know if the current oil prices will affect air travel and if it's going to be a booming sector in the near term,'' Benard said.

Turquoise Waters

The companies are trying to get resort and hotel operators, including Singapore-based Banyan Tree Holdings Ltd., to participate in the project, Kith Meng said.

Royal Group and Millennium plan to develop the 76 square- kilometer (29 square-mile) Koh Rong island, now inhabited by fishermen, into a ``luxury resort destination,'' according to the document. The island has 28 white sand beaches, including the 6.1 kilometer Snowdrift Beach, surrounded by shallow turquoise waters.

Kith Meng, who was educated in Australia, declined to say how much Royal Group is paying the government for a 99-year lease to the island.

Royal Group also is planning to build a resort in Siem Reap, near the temples of Angkor Wat, with India's Oberoi Group. Royal Group already has a telecommunications venture, MobiTel, with Luxembourg-based Millicom International Cellular SA, and another partnership in Cambodia with Australia & New Zealand Banking Group Ltd., Australia's third-largest bank, called ANZ Royal Bank.

To contact the reporter on this story: Netty Ismail in Singapore nismail3@bloomberg.net.

Tourism: The islands of temptation

04 March 2008
By Ky Soklim
Cambodge Soir Hebdo
Translated from Khmer by Luc Sâr

About 10 islands were already leased to private companies for tourist development. The government hopes to attract new visitors in this manner, but the protection of the environment should not be put in the back burner.

Two islands offshore of Sihanoukville were recently leased to private companies. Along with these 2 latest islands, the number of leased Cambodian islands and islets amounted to 11. At the end of 2007, six islands were leased to seven private companies. This phenomenon could accelerate: “the development of islands becomes a catalyst for attracting more tourists,” a communiqué dated 28 February 2008, from the Council of Development of Cambodia (CDC) explained. This communiqué was made public during the signing of the latest lease contracts for the two islands offshore of Sihanoukville. The kingdom – which attracted 2 million visitors in 2007, and 3 million are expected to visit in 2008 – seeks in fact to diversify its tourist attractions which, for the moment, is concentrated mainly on the Angkor Temple.

The Royal Group Co. Ltd. Telephone Company, led by Kith Meng, just obtained the lease of the Koh Rong Island. His project to develop an eco-tourist site extending over 7,826-hectare is estimated to cost several million dollars.

With similar objective, the Koh Russey Resort Co. Ltd. (KRRC) Now has access to 76-hectare of the total of 137-hectare of land on Koh Russey Island. KRRC plans to invest $48 million. The two concessions extend over a period of 99-year. Both of the leases underscore the lack of information regarding the upcoming development plan. None of the two investors want to reveal their plan.

Cambodia counts 55 islands altogether. “They attract millionaires who want to settle there,” said Touch Sieng Tana, a member of the committee for economic and cultural observation of the Council of Ministers. However, tourist development of these islands is not simple. “They require experienced investors.”

Moeung Sonn, Director of the Eurasie Travel agency, said that he is in favor of the diversification of tourist zones, but he reminded that the protection of the environment should not be neglected. “Development and conservation must go hand in hand,” he suggested. The CDC also adopts the same attitude. “The investment zone and the protected zone must be separate from each other, deforestation must be avoided.” Furthermore, these areas should not be filled nor built with concrete everywhere, otherwise, the tourists will flee from these so-called eco-tourist zones.

Multi-millionaire Kith Meng leases the largest island in Sihanoukville for 99-year [-More evictions to come on these leased islands]

Friday, February 29, 2008
Rasmei Kampuchea
Translated from Khmer by Socheata and Heng Soy

The Council for the Development of Cambodia (CDC) declared on Thursday that the government decided to lease the 7,800-hectare Koh Rong Island, the largest island in Sihanoukville, to Oknha Kith Meng’s Royal Group Company, for a duration of 99-year for eco-tourism development. On that same day, the government also declared the leasing of a portion of the Koh Russey Island in Sihanoukville to a French investment company.

Kith Meng, the CEO of the Royal Group Company, signed the lease contract on Koh Rong Island on 28 February 2008 with Cham Prasidh, the minister of commerce and CDC vice-president.

Suon Sithy, the secretary general of the committee for investment in Cambodia, declared that the development of Koh Rong Island is very large because the island extends over an area of 7,826-hectare altogether. He said that, even the Royal Group did not declare about the actual amount of investment funds now, but based on the negotiation results for the development of Koh Rong Island, the plan was to invest a huge fund amounting to several millions of dollars, because the investment was included in the contract and constitutes the government priority plan.

Kith Meng did not make any declaration about the development plan of Koh Rong Island during the signing of the contract which was participated by several institutions involved. Suon Sothy added that, after the signing of the contract, the Royal Group has 18-month to cooperate with the planning committee to come with a study on the (development) master plan and submit it for review and final approval by the CDC.

Suon Sothy also said that, (the CDC) places high hope on Kith Meng, who is a local investor and president of the Cambodian Chamber of Commerce with several successful businesses, will resolve the development issue with the people (living on the island) in a reasonable manner, and that he pushes the development plan of Koh Rong Island to fruition.

At the same time, the CDC also declared that a 137-hectare portion of Koh Russey Island, in Sihanoukville, was also leased to the French Koh Russey Resort Company for a duration of 99-year for eco-tourism development.

Suon Sothy said also that the plan for the development of Koh Russey Island is part of the government priority plan to serve the eco-tourism industry. The plan for the development of Koh Russey will requires a spending of $48 million. On this issue, CDC is confident that the French company which has sufficient experience in this field, will be successful in the implementation of its development plan.

Brash, ambitious (read greedy), ruthless ... Kith Meng is Hun Sen's tiger cub (read crony)

02.11.08
By Ron Gluckman
Forbes

Brash, ambitious, some say ruthless, Kith Meng is building an empire in the newest tiger economy.

A towel around his neck, the slight Cambodian in a sweaty Nike (nyse: NKE - news - people ) sports shirt shouts instructions into a cell phone. He's stomping across the spacious lawn of the Cambodiana Hotel with an arrogant swagger, like he owns the place. Which, in fact, he does.

He's Kith Meng, and that same swagger is on display practically everywhere you look these days in Cambodia. From hotels to telecoms and television, banking, insurance, even education, Kith's Royal Group has a finger in nearly every pot simmering in Asia's newest tiger economy.

Long derided as a backwater that utterly missed the Asian economic boom, Cambodia has been racing to make up for lost time. News that the economy surged by more than 13% in 2005 caught everyone's attention. But growth has averaged 9% annually since 1998, says Stephane Guimbert, senior country economist at the World Bank. That's the second fastest in Asia, after China. Last year growth may have hit 10%.

Granted, it's from a very low base, and exports are mainly textiles. But investment has picked up in the expectation that oilfields off the southern coast will be developed. Real estate is skyrocketing, faster than anywhere in Asia outside of China. And the country drew more than 2 million visitors last year for the first time. Plans call for a stock exchange to open in 2009.

Susan Schwab, who in November became the first U.S. Trade Representative to visit Cambodia, praises its liberal investment laws and a commitment to cleaning up rampant corruption. "This is a wonderful story, for any country, more so one so scarred by its past," she says. "If the buzz factor hasn't already hit, it's definitely developing." Her visit coincided with a landmark Phnom Penh investment conference. "We expected 300 people, but there were over 500," says Christopher Bruton in Bangkok, one of the organizers and a researcher and consultant in Cambodia for decades. "We have never seen such interest in Cambodia."

Kith happily notes: "Before, people used to think of this as a place of war and instability. But now we are part of the global economy, and everyone is coming."

When they arrive, many have no choice but to court Kith, who, more than any of the country's other tycoons, stands as the rugged role model for wheelers and dealers in this anything-goes, frontier economy. "He's a real rags to riches story," says Dean Cleland, chief executive of ANZ Royal, which is planting ATMs and the bank's vivid blue logo everywhere around Phnom Penh. Australian banking powerhouse ANZ holds 55% in the joint venture, with Kith holding the rest, but nobody would consider him a meek minority shareholder. "We have strong and rigorous board meetings," Cleland says.

The word around town is that the two sides battle constantly, with ANZ struggling to distance itself from a meddlesome Kith. "Who said that?" Kith snorts, temper flaring at any inkling of criticism. Yet he quickly calms down, chuckling as he concedes: "My role in the partnership is to push. And push. I'm like the driver."

It's clearly a role he relishes. And, whatever confrontations ensue behind closed doors, the combustive mix has propelled the venture into a lead role in a banking market that may be growing at 30% a year, fueled by the bubbling real estate market. Of course, Kith also claims plenty of prime Phnom Penh plots.

New high-rises are rapidly reshaping a city skyline still dominated by a 15-story Intercontinental Hotel. But 40-story office, commercial and residential towers are on the rise. Just to trump them, Kith vows to build one 45 floors high. Then came the announcement last month that the 52-story International Finance Tower had gotten approval. Kith will surely adjust his sights higher.

Many of Phnom Penh's streets are still unpaved, and there isn't a single Golden Arches or Starbucks (nasdaq: SBUX - news - people ) yet. Hence, at the opening late last year of a Swensen's, a U.S. chain of ice cream parlors, none other than the U.S. ambassador and the commerce minister cut the ribbon. The hunger for fast food will be satisfied this year by the first Kentucky Fried Chicken outlets opened by--who else? Kith, who also has the Pizza Hut concession.

"He's not an entrepreneur in the traditional sense of creating new businesses," notes one close friend. "What he does is go out and get the business that Cambodia needs. He brought in mobile phones, television, banking, insurance. He's the right guy at the right time."

Take ATMs. When ANZ opened in late 2005, there were hardly any in Cambodia. "We wanted to bring in 25," Cleland recalls. Kith wanted 100. "We ended the year with 52, which seemed a fair compromise," Cleland says. The number quickly topped 90 and will surpass Kith's goal any day.

Not that Kith is satisfied. Now he's barking about credit cards. No Cambodian bank issues plastic, not surprising considering the country's rather recent financial turmoil. Money finally returned to circulation after the Khmer Rouge outlawed currency, blew up the banks and turned clocks--and this war-torn nation--back to Year Zero.

Cleland says there may be 6,000 credit cards issued by overseas banks in the country. He reckons that cards rarely make financial sense until the number reaches 100,000. But Kith is guided by intuition, not market studies. "In his words, you cannot be the number one bank without credit cards," Cleland says. And guess what? "We're rolling them out in April," he notes.

The bank boss may not be very excited about the $1.5 million likely to be spent on the rollout, but he's quite satisfied with a profit of $541,000 for 2007--years before any profit was projected. All the more impressive, it comes as the bank plows cash into expansion. "This has been a good partnership, for both sides," Cleland says. "[ANZ] tends to be more cautious, but that definitely isn't his style. He's very aggressive, very bullish."

ANZ almost took a pass on Cambodia. "If not for Kith Meng, I don't think we'd be here," says Cleland. "A lot of people ask why ANZ is in Cambodia. The answer is that he went to Australia looking for a bank for the country. He made the rounds and came back and told us that of all the banks, we were the one that had said 'No' the most politely." Cleland says ANZ had previously assessed Cambodia: "It came up as a market that was too small, and it was too soon." Kith pressured ANZ to reconsider, suggesting that it fly people in for a new look. If they didn't like what they saw, he would pay for the trip. What ANZ saw was a huge cash economy bigger than what bank deposits indicated. "We caught the wave at exactly the right time," Cleland says.

ANZ may know banking, but Kith has the Midas touch in Cambodia. And he clearly stands apart from both the old money--made mainly in mining, logging and smuggling in the 1980s and 1990s--and the new entrepreneurs starting restaurants and tourism businesses. The older tycoons tend to be reclusive and tied by blood or marriage to the political leaders. In contrast the brash Kith is only 39, unmarried and linked to nothing but the pursuit of profit. Many call him the new face of Cambodian capitalism.

Insurance firms see healthy growth [-Kith Meng, Hun Sen's crony, launches into the lucrative business]

By Lachlan Forsyth
Phnom Penh Post, Issue 16 / 16, August 10 - 23, 2007

The Kingdom's recent banking bonanza has prompted one of Cambodia's richest men, Kith Meng, to help launch Infinity Insurance in an attempt to harness the industry's increasing profits.

Jeffrey Whittaker, Infinity's chief operating officer, said huge inroads made in recent years by the banking industry and foreign direct investment had shown Cambodia was a viable, and lucrative, market.

"It's no longer just aid that's coming in. Aid is nice but foreign direct investment is much better. There are a lot of infrastructure projects going on - railways, roads, sewage and wastewater treatment, new cities - it offers a lot more scope for insurance business."

Infinity has some high quality backers, among them global giant Swiss Re and Meng's Royal Group which includes Mobitel, ANZ Royal Bank and CTN.

In order to operate in Cambodia, insurance companies must have $7 million worth of capital. This is a government requirement in order to ensure companies have enough cash in reserve to meet claims.

Insurance is viewed as an essential product for a well-functioning financial market. As the government plans to introduce, among other advances, a Cambodian stock market, new insurance carriers are undoubtedly to be welcomed.

But the industry has had a stuttering start.

In 2004, market leader Indochine, was forced out of business when it failed to meet government demands for a $700,000 installment of its required $7 million capital.

Indochine managing director Philippe Lenain said he had been victimized by the government-owned Caminco, and was hounded out of business despite his assurances he could meet capital demands.

He said that such high operating costs in an industry then worth just $8 million would strangle the life out of industry players.

Lenain fled the country with his family after taking refuge in the French Embassy when he claimed their safety had been threatened.

Those who remained in the market are now seeing considerable gains.

Cambodia Re Director of Operations, Rath Sarath, said after a slow start the company was now starting to see profit.

As a reinsurer, it provides financial backing to insurance companies in exchange for a compulsory stake in the state-owned company. "Up until now my company was successful but not so successful that we could say profitable," he said.

Cambodia Re's annual report showed a 20 percent Gross Written Premium or GWP - which refers to the total premium from all policies - increase in 2006 and it doubled its net income from 2005.

As the profit increased it was able to continue its investments and ensure that capacity [the amount of cash reserved to ensure claims are paid] was extended each year - ultimately benefiting the insurance companies.

The capacity and number of insurers was likely to increase year on year, he said.

Whittaker was similarly excited by Cambodia's potential now that overseas cash was flowing, but admitted there were several challenges to overcome.

Infinity's product range includes construction, engineering and marine cargo policies and policies such as fire, theft and personal injury, the former aimed squarely at the corporate market, with the latter also applicable for individuals.

Policies for fire, engineering and construction, motor and miscellaneous (including liability) insurance accounted for 87 percent of all non-life GWP in 2006, and industry figures showed these classes had been steadily growing for the past eight years.

However, about 95 percent of these policies are placed with the corporate market, and the remaining personal policies are largely motor policies, often placed through corporate schemes.

These figures showed that although the corporate market was increasingly aware of risk and insurance was becoming more commonplace, breaking into the personal insurance market would be much more difficult. "The sheer fact is up until the last couple of years not many individuals had bank accounts - it was a cash society," said Whittaker.

"The perception is it's expensive, it's a luxury product. We're aiming to convince the public that insurance is not a luxury, it's an affordable essential product - it's more expensive if you have an accident and have no protection at all."

The total insurance market in Cambodia, estimated to be worth less than $8 million in 2004, has now grown to $15 million and is expected to increase rapidly as its potential is realized.

A 2005 Ministry of Economy and Finance industry review said the non-life insurance business in Cambodia had been growing at more than 25 percent compound for the past four years.

It anticipated an explosion in the personal and medical lines of business as incomes rose.

Cambodia's current crop of insurers is small - Infinity joins Caminco, Asia Insurance, Forte and Cambodia Re.

But anticipated market projections suggest more competitors would soon join them.

The government's "open, friendly investment policy" meant there were few barriers towards setting up business in Cambodia, said Whittaker.

The perception of insurance and in banking until a few years ago was "we don't do banks, we keep it under our beds," he said.

The intangible nature of insurance was often a reason for reluctance, said Whittaker, but the fact remained insurance was "one of the cheapest financial products in the world."

"People don't think about it...they're willing to buy a flat screen TV and a car and everything else but insurance comes at the very bottom of the pile. That's our problem to change."

Insured for a good reason

• Lloyd's of London - the world's largest insurance market - started in Edwards Lloyd's Tower St coffeehouse in 1688. Sailors, merchants, ship-owners and others from the shipping community would meet to discuss shipping news and make insurance deals.
• Chinese merchants are believed to be the first to practice a form of insurance, around 2000-3000BC. When the traders encountered violent river rapids they would spread goods among many ships in the event one met an unfortunate demise.
• In 2006 a British insurer reportedly insured three Scottish sisters against Immaculate Conception. The policy, intended to cover the costs of raising the Son of God, was later cancelled after complaints from the Catholic Church that it was in 'poor taste'.
• Among the more impressive personal assets to be insured are Keith Richard's fingers; Marlene Dietrich's voice; America Ferrera's [TV's Ugly Betty] smile for $10m; Dolly Parton's 42" bust for $600,000; Betty Gable's legs for $1m, thereby giving rise to the expression "million dollar legs".