Kampot rail scheme dismissed as ‘fantasy’

KAMPOT provincial governor Cheav Tay created an unauthorised investment scheme last week. But the plan has been dismisssed as a “baseless fantasy”.

He set up a firm called Kampot Capital Development, which plans to raise $50 million from individual investors to develop a high-speed rail and a provincial airport.

However, financial experts and capital market professionals rubbished the scheme. They told The Post yesterday that the project is unlikely to happen as it is nonsense from both a legal viewpoint and an economic perspective. They said Tay’s plan is what is known as a “Collective Investment Scheme (CIS)”.

Tay proposed the plan during an internal meeting in Kampot, where video was taken of his speech and shared on social media.

In his speech, Tay said he plans to collect $50 million in funding by trading publicly and offering shares, which individuals could buy at $1,000 each.

He said the funds raised were to be used to set up an investment firm called Kampot Capital Development which aims to develop a high-speed rail and an airport.

“We [will issue] 50,000 shares in order to collect $50 million. Shareholders could include nationals as well. Among other ways, I’ll take a risk and purchase 100 shares equal to $5 million to lead the way in this endeavour.

“In the future, Kampot province will have a high-speed rail connecting Phnom Penh to Kampot in a matter of an hour. We also plan to have a new airport that can attract local and international travellers alike,” Tay said in the video shared on social media.

No representative from the Securities and Exchange Commission of Cambodia (SECC) could be reached for comment on Sunday.

C a m b o d i a S e c u r i t i e s Exchange (CSX) CEO Hong Sokhour stated that the plan should be considered a CIS. For any CIS project to be put in operation, it must first have approval from the SECC. Sokhour further noted that as he understands, the SECC has never approved any CIS project in Cambodia to this date.

“To operate such a project, they need to get approval from the SECC first, otherwise they have no authorisation to collect the funds,” he said.

RHB Indochina Securities’ CEO Iv Ranarith said yesterday that the plan was proposed with an insufficient understanding from either a legal or economic standpoint.

“The project does not make any economic sense,” he said.