Cambodia's Mfone ordered to repay $3.7M debt

Summary: Cambodian court has ruled in favor of Norway-based Eltek Valere over Mfone's failure to pay US$3.73 million in service charges for its GSM equipment.

By Ellyne Phneah | November 5, 2012

ZDNet (USA)

Norway-based Eltek Valere has won a court injunction against Mfone, the Cambodian mobile subsidiary of SET-listed satellite operator Thaicom, for its failure to pay outstanding service charges.

According to The Bangkok Post on Monday, citing court documents, the Phnom Penh Municipal Court ruled in favor of Eltek Valere over unpaid service fees amounting to US$3.73 million. After reviewing Eltek's complaint, the court ordered the mobile opeartor to provide an assessment of its inventory and banned the company from selling any of its assets until the situation is resolved.

Mfone had not fulfilled its contract with Eltek because it did not pay for the equipment implemented for its GSM network, according to the complaint filed by Eltek on Oct. 9. The Norwegian company had helped Mfone develop its satellite technology for its mobile network.

Eltek also tried to negotiate with the company several times, informing it of the debt through their lawyer, but Mfone did not agree to pay and "even used tricks to delay talks many times until Eltek could not take it anymore", the complaint said.

The complaint also cited a letter signed by former Mfone CEO Yap Wai Khee on Sep. 5, 2011, addressing Eltek's head office in Singapore, which stated the mobile company was unable to make payment due to an ongoing restructuring of Mfone's debt in Cambodia. The letter also suggested paying monthly instalments of U$10,000.

Eltek's court injunction also comes after two other Cambodian mobile operators Hello Axiata and Latelz threatened to sue Mfone unless it repays "hundreds of thousands of dollars" it allegedly owes in interconnection fees, The Cambodia Daily last week reported.

Thaicom, Thailand's sole satellite service provider in August said it expects to sell Mfone by the end of the year to help them unload losses, a separate report by The Bangkok Post noted.