Cambodia accuses Malaysian-owned telco of 'illegal' cable-laying
Regulator warned of possible legal action against German CEO of Smart Axiata
SHAUN TURTON, Contributing WriterOctober 28, 2021 15:00 JSTUpdated on October 28, 2021 17:24 JST

PHNOM PENH -- Cambodian regulators have sent shivers through the telecom industry with a threat to launch criminal proceedings against the German head of Smart Axiata, a Malaysian-owned telecommunications company that they accuse of "illegally" laying fiber-optic cable.

Experts say the move, which comes as regulators have ramped up auditing of the telecom sector, could have major repercussions for foreign investment in the country.

The Telecommunication Regulator of Cambodia (TRC) last week requested that the country's judiciary launch criminal proceedings against CEO Thomas Hundt. On Tuesday, Axiata announced that Hundt, who sources say is currently in Germany, would be giving up his responsibilities in Cambodia and joining its Malaysian operations.

In a response to questions from Nikkei Asia, Cambodia's Ministry of Posts and Telecommunications on Thursday appeared to have softened its stance, saying its court complaint had been filed but later "withheld" after Axiata employees agreed to cooperate with regulators' investigation.

In a response to questions from Nikkei Asia, Cambodia's Ministry of Posts and Telecommunications on Thursday appeared to have softened its stance, saying its court complaint had been filed but later "withheld" after Axiata employees agreed to cooperate with regulators' investigation.

"It should be noted that no criminal proceedings have been initiated against any person at this time," the ministry wrote.

In a letter dated Oct. 22 and seen by Nikkei Asia, the TRC requested a "prosecutor to summon and take legal action against Thomas Hundt the CEO of Smart in accordance with criminal procedures."

In a statement released on its website, the TRC detailed its claims against Smart, one of Cambodia's largest mobile and internet service providers. The company is owned by Axiata Group, a publicly traded Malaysian conglomerate.

The statement says a "special audit" done with the Ministry of Posts and Telecommunications' General Inspectorate had uncovered "illegal laying of fiber-optic cable" by the company in three rural areas totaling 16 km. "As a result, evidence has been seized and retained for further legal procedures, which may lead to possible arrests of related individuals and actions against Smart Axiata."

In its response to Nikkei, the MPTC said Smart had been cited for "avoiding the payment of some of its microwave license fee obligations," laying fiber-optic cable without a license, and possessing "unapproved radiocommunication and telecommunication equipment."

The agency said Smart's technicians had initially refused to cooperate with officials, prompting the TRC to file a complaint...

Stephen Higgins, managing partner of investment management firm Mekong Strategic Partners, said the sector's opaque regulatory environment meant companies have long faced uncertainty over compliance issues.

"That a company CEO can be threatened with prosecution for something like this would put a chill up the spine of anyone thinking about doing business in Cambodia," he said.
Full article: https://asia.nikkei.com/Business/Teleco ... ble-laying