Executives Detained After Angry Protests Over Lao Agro Investment Firm Default
Police detained two top executives of an Lao agricultural company on Tuesday, the second day of protests by hundreds of angry investors who say they lost their savings in a pyramid scheme that took in millions of U.S. dollars.
Por Her and Souknaly Thepsimuang, co-presidents of the PS Agriculture and Industry Promotion Import-Export Company of Laos, were taken from company headquarters in Vientiane in a dark police van to Phon Thanh Detention Center in another part of the capital, witnesses said.
“The authorities arrested the two presidents in late afternoon today. It is still unclear whether the two presidents will be charged or just detained to ease the tension,” a PS customer told RFA's Lao Service as the second day of protests wound down after the detentions.
The detention of the pair, whose legal status remains unclear, came on the second day investor protests as PS headquarters that saw more than 1,000 people turn out on Tuesday, following a crowd of hundreds on Monday.
On Monday, angry crowds of mostly women chanted “let’s fight, let’s fight, let’s fight” and a woman with a microphone declared "we are here to demand our money back” as they demanded to see PS executives.
“Please come out, open the gate and talk to us. Don’t be afraid of people; we people don’t have guns, have only two empty hands,” shouted one woman.
“When accepting money from us, you were happily and smilingly taking our money; but now when we are coming here to ask the money back, you don’t even come out to meet us," said another woman.
Monday's crowd dispersed, except about 40 people who came from provinces and stayed overnight in tents in from of the PS building.
On Tuesday, representatives of the investors and the PS management team held negotiations, but they broke down. When Por Her tied to address a crowd as tensions rose, the crowd refused to listen to him.
After the executives were detained, a special taskforce committee set up by government earlier this year to resolve the conflict met with the investors and agreed to include investors' representatives on the special committee.
“The meeting produced an agreement to include investors in the committee set up by government earlier. So from now on, the investors will participate in all decision and solution making,” an official from the capital's Xaythany District told RFA.
PS Agriculture ceased providing promised interest payments in January this year and as investors sought to withdraw their capital, they were told it had been used to build infrastructure and attract new deposits through high rates of return, leaving them little recourse.
On July 6, 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. $12.14 million) it owes investors.
The firm had registered as an agricultural company in 2012 with 900 million kip (U.S. $109,240) of capital to produce purified drinking water, noodles, run a rice mill, and farm organic chickens and vegetables.
The company solicited deposits of between 500,000 and 5 million kip (U.S. $61 and $608) 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.
In an earlier RFA report on PS Agriculture, 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 who decided to contribute to the fund based on the advice of friends or family didn’t understand the contract behind their investment or even the basic procedures of the company.
Executives Detained After Angry Protests Over Lao Agro Investment Firm Default
