Banking on a break-up
Banking on a break-up
Australia and New Zealand Banking Group Limited (ANZ) is looking to sever its ties with local partner Royal Group, chief executive officer Mike Smith said yesterday in Hong Kong in remarks that could signal the break-up of one of Cambodia’s biggest banks.
The comments about the two firms’ joint venture in Cambodia, ANZ Royal Bank, come months after audits revealed that the bank had financed ruling party senator Ly Yong Phat’s controversial Phnom Penh Sugar Company, and more than a year after Post reporters found children labouring on the sugar plantation.
Smith’s statement first appeared in the The Sydney Morning Herald yesterday evening, in reference to a split from ANZ’s holdings in Vietnam’s Sacombank in 2012.
“We would like to do the same in Cambodia. I would much rather have a wholly owned business in these places,’’ Smith was quoted as saying.
Smith did not mention child labour or the sugar plantation, though he has said in the past that stakes in Asian banks could be problematic as ANZ receives a portion of the profits while risking its entire reputation, the Sydney Morning Herald reported.
ANZ Royal Bank’s CEO Grant Knuckey said that it has always been a long-term strategy for ANZ to be fully owned in any of its locations. He denied that Smith’s comments were related to the Phnom Penh Sugar case.
“There is nothing currently in train in terms of the local business, but the preference for 100 per cent is there as stated,” Knuckey said, referring to the lack of any immediate deal on the table to part ways.
Started in 2005, ANZ Royal Bank is 55 per cent owned by ANZ and 45 per cent owned by Royal Group.
Royal Group chairman and CEO Kith Meng did not immediately respond to a phone call or a text message.
Phnom Penh Sugar Company has been at the centre of a years-long dispute following the forced eviction of hundreds of families from an 8,343-hectare land concession in Kampong Speu province.
ANZ Royal’s involvement in the firm was revealed in two audits instigated by the bank. The second audit in 2013 showed that the company had obtained financing from ANZ Royal, while ignoring 60 per cent of recommendations made in the initial audit.
In January last year, a Post investigation revealed that children as young as seven were being employed to cut sugarcane on the plantation. In response, Phnom Penh Sugar announced a zero-tolerance policy for the practice.
phompenh post
