Telecom Cambodia: Let the skeletons out of the closet


Telecom Cambodia has been preparing for an IPO since early 2011.  Initially it was intended to complement the IPO of PPWSA to launch to CSX (Cambodia Securities Exchange).  However, the company was far from ready for the IPO and it has continually been pushed back.

Fast forward to 2013 and staff at Telecom Cambodia have protested corruption by the Chief of the company.  They have in effect, blown the whistle and the ACU (Anti-Corruption Unit) of the government is now investigating the allegations.  While the ACU’s record is questionable, with only 20 cases investigated since 2006, there does seem to be strong public pressure to investigate this thoroughly.

What is noteworthy, is that this is the first case in Cambodia, where the staff of the company themselves have filed a complaint for corruption.  Generally, in state-owned enterprises (SOEs) such as Telecom Cambodia, the corruption is pervasive and systemic.  The large number of staff that protested outside of the company’s headquarters for five days must have nothing to hide, because they know that the ACU will be very thorough with this investigation, given its national significance.

This should give comfort to those thinking of investing in Cambodia.  It means that whistle-blowers are willing to act en masse, to stem corruption.  Mind you, this outcome is the result of egregious corruption, but nonetheless, the fact that staff do not fear for job security or their own safety are a very positive signal for Cambodia in our opinion.

Expectations are that the company will be able to IPO in 2013.  We will be following this closely.  We already have an account set up in Cambodia and are ready to invest.  We will pay close attention to the corporate governance at Telecom Cambodia in our valuation and assessment of the IPO, but this definitely is a strong positive indicator that the company will try and limit graft to the extent that is practicable.

If you would like any further information about investing in Cambodia or who to contact, check out our earlier post here.


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