A court in the Lao capital Vientiane today handed 15-year prison terms to the owners of a company accused last year of defrauding investors of thousands of U.S. dollars in personal savings, a Lao source says.
Por Her and Souknaly Thepsimuang, co-presidents of the PS Agriculture and Industry Promotion Import-Export Company of Laos, were convicted of a wide range of charges and were sentenced at first to 27 years and 29 years respectively, a source in the country told RFA’s Lao Service.
“But their sentences were then reduced to 15 years,” RFA’s source said, speaking on condition of anonymity.
The pair were also fined 2.8 billion kip (U.S. $351,533) each, the source said.
Charges on which the two company owners were convicted included defrauding Lao citizens, money laundering, trafficking in weapons, and processing the body parts of endangered wildlife, with no explanation of some of the charges against them immediately available.
Reached for comment by RFA, a Vientiane People’s Court judge named Saysamone confirmed the 15-year sentences but declined to comment further on the case.
Company assets seized by authorities included money deposited in 50 separate bank accounts, 37 plots of land, and 112 vehicles, RFA’s source said.
On July 6, 2017, PS Agriculture failed to meet a deadline ordered by the Bank of the Lao PDR—the country’s Central Bank—to repay the nearly 100 million kip (U.S. $11,717) it owed investors.
News that PS Agriculture had ceased providing promised interest payments then led over a two-day period in September to protests by hundreds of angry investors who turned up at company offices.
The firm registered as an agricultural company in 2012 to produce purified drinking water and noodles, run a rice mill, and farm organic chickens and vegetables.
The company then solicited deposits of between 500,000 and 5 million kip (U.S. $59 and $585) per person for an expansion fund, promising monthly interest payouts of at least four percent, and bonuses of 24 percent to those who maintained their deposits for a year—far surpassing rates offered by Lao banks.
After an investigation, the Lao central bank determined that the company had promised investors “impossibly high dividends” and warned the public about the risks.
Bank officials said PS was in any case not legally permitted to raise funds because it was not registered as a financial entity, and the bank had ordered it to obtain a new registration.
Sources acknowledged that investors were at least partially to blame for pursuing what they saw as a get-rich-quick scheme without fully researching how the company’s expansion fund operated, and that many had decided to contribute to the fund based on the advice of friends.