State-owned enterprises say govt ordered them to list at new bourse

Wednesday, 16 September 2009 15:00 Nguon Sovan

Three firms say they received letters from the Finance Ministry in May telling them to prepare to list on the Cambodia Stock Exchange, but that the listing will be of little benefit to operations

THREE state-owned enterprises confirmed Tuesday they have been instructed by the government to list on the Cambodia Stock Exchange but said that they would do so only reluctantly.

Telecom Cambodia Director General Lao Sareoun said he was worried the listing would interfere with the state-owned telco’s business operations, as it lacked the human resources needed to prepare an initial public offering.

“This is a new venture, so it needs human resources,” he said. “But we do not have any experience at all in this field, so we are worried that it will be an inconvenience to our business operations, which are growing well at the moment.”

He said the company met listing requirements in terms of financial performance and governance transparency, but warned that it may not be ready to list until the end of next year due to human resource constraints, despite assistance from the Ministry of Finance.

Ministry of Finance officials have said they want to open the exchange by the end of this year, but have acknowledged that the launch would depend on the readiness of the three state-owned enterprises earmarked to be the first to join. They originally planned to launch the exchange on September 9.

No benefit
The other enterprises slated to list when the exchange commences operations are Sihanoukville Autonomous Port and the Phnom Penh Water Supply Authority (PPWSA).

PPWSA Director General Ek Sonn Chan said all three firms received letters in May from the Finance Ministry instructing them to prepare for a listing. However, he said the PPWSA did not need to raise money, meaning its participation would only be to assist in the successful functioning of the bourse.

“The government wants us to join, so we will join,” he said. “It is not my idea, but the idea of the government, and PPWSA is a government entity so we must abide by the government’s decision.”

Sihanoukville Autonomous Port CEO Lou Kim Chhun said the port was adopting international accounting standards under instruction from the Finance Ministry, but that the listing was purely an initiative of Finance Minister Keat Chhon.

He said the port had reduced expenses in order to make revenues go further and said the business was healthy ahead of the listing.

“By the end of this year, the improvements in both our accounting standards and our business health will be in place, and both will be internationally recognised,” he said.

Ek Sonn Chan said PPWSA’s accounting and financial reports had been audited by an international auditing firm, and that its governance and management were of a high enough standard to satisfy listing requirements.

He said the government still planned a “soft opening” of the exchange this year, “probably in October”, but said real operations would not commence until a year after the soft opening.