CD: Cambodia Airports Comes Under Attack by a Former Executive

April 8, 2013 – Simon Marks, The Cambodia Daily

Philippe Laurent became secretary-general of Cambodia Airports in May 2008. He was one of six senior executives in charge of the country’s international airports in Phnom Penh, Siem Reap and the little-used facility in Sihanoukville.

As secretary-general, Mr. Laurent said he was in charge of human resources, provided legal advice on contracts, handled financial documentation and, as befitting someone of his position, he enjoyed the privileged existence of a senior executive complete with a chauffeur and company car.

In January, Mr. Laurent was fired.

Cambodia Airports said his employment was terminated after he refused to accept a new position at the company’s headquarters back in France following the conclusion of his posting abroad.

Mr. Laurent has a very different explanation for his removal, one that involves putting corporate good governance to the test and questioning the nature of some of Cambodia Airport’s business dealings.

As a result of those questions, Mr. Laurent claims that he suffered the ultimate fate, and was removed.

He is not giving up though.

Mr. Laurent is now carrying out a one-man campaign against Cambodia Airports in Cambodia and in France, where Vinci, the company’s major shareholder, is headquartered. He has lobbied French politicians, the press, and financial regulators. He is doing the same in Cambodia, telling his story to anyone who will listen.

Mr. Laurent’s allegations against his former employer are legion, including inflating costs from procurement of landing equipment to architectural plans for airport redesigns—all of which are strenuously denied by Cambodia Airports.
And there is a conspiracy too.

It is a complex plot, according to Mr. Laurent, involving businessmen and government officials in Cambodia and France, French Freemasons, politicians, and France’s intelligence services.

“I’m a democrat. I like the truth and I’m a humanist,” Mr. Laurent said in a recent interview in Phnom Penh.
“I hate corruption. If you take corruption out of a country everyone has a job. I belong to no political party. I am not a socialist, nor a communist. I am a humanist.”

Cambodia Airports is 70 percent owned by Vinci Group, Europe’s largest construction company, and 30 percent by Muhibbah Masteron (Cambodia). Muhibbah Masteron is 70 percent owned by Malaysia conglomerate Muhibbah Engineering Berhad and 30 percent owned by two Cambodian businessmen, Kong Triv and Hann Khieng.

Despite the global financial crisis, the past few years have been good for Cambodia Airports, which operated under the Societe Concessionnaires Des Aeroports (SCA) name until 2011.

SCA was awarded the concession to operate the country’s airports in 1995, and that contract does not expire until 2040. In the almost two decades since beginning its work, Cambodia Airports has steadily built up its activities, a growth that mirrors the expansion of the country’s nascent tourism industry, which has exploded from a mere 118,183 visitors in 1993 to more than 3.5 million last year.

Cambodia Airports earns revenues of about $100 million every year through a $25 service charge for every passenger that passes through the airport, as well as landing fees, aircraft cleaning fees, parking tickets, cargo related business, storage facilities, and leasing floor space to airline companies, fuel supply companies and the airport’s catering business. It also earns money from the commercial shops inside and outside of terminal buildings.

It is a sophisticated operation, and Mr. Laurent had an important job as secretary-general, which made him responsible for human resources mainly, but also placed him, he says, in charge of a team that reviewed the legal status of contracts signed by Cambodia Airports.

Now he distributes large quantities of once private emailed correspondence pertaining to Cambodia Airports, and other documents, as part of his self-styled campaign to expose his former employer.

One of those emails was sent by Mr. Laurent to 11 French senators in December. This is what he wrote:

“My colleagues and I have worked for several years to try and assassinate the unethical environment of these businesses, but to no avail. We have just discovered a short time ago that we were in a money laundering machine for the management of the group at an international level between the following countries: Cambodia, Malaysia and France,” Mr. Laurent told the senators.

“We believe that at the very least one hundred million dollars have been redirected from these businesses into the personal accounts of certain managers,” Mr. Laurent alleged in his email to the Senators.

Three days later he received the following response from Berengere Batiot, an assistant for Ronan Dantec, who is a French senator for the department of Loire Atlantique and a member of France’s climate change council:

“Senator Dantec thanks you for having provided him with this information. We will pass your message directly to Eva Joly [a former presidential candidate for France’s Green Party], who is a specialist in these matters.”

In February, the investigative French news website Mediapart, which was founded by a former editor of the newspaper Le Monde, published an article detailing Mr. Laurent’s allegations.

Friends and former colleagues of Mr. Laurent describe two very different men: One is a defiant whistleblower, who has worked inside Europe’s largest construction company for years and has now decided to speak out. Another is a man with a tenuous grip on reality who believes he has information on a financial scandal so big that his safety cannot be guaranteed if he goes back to France, and that he is a target of both the freemasons and France’s external intelligence agency.

Adding another layer to the plot, Mr. Laurent himself admits to being a Freemason—a cultish sect that regularly draws the interest of the French public, who see the organization as a powerful and secretive network of businessmen, politicians and intellectuals with a hidden agenda. Mr. Laurent, however, says that his Masonic lodge is different to the Freemasons that he claims are now in the league against him in Cambodia.

Another email that Mr. Laurent carries with him is a mutually embarrassing document accidentally sent to his wife by the French Embassy in Phnom Penh, which says the embassy believes there are psychological grounds that should compel Mr. Laurent to return home to France. Mr. Laurent, however, denies that there is anything wrong with his mental faculties, and he sees such claims as another part of the plot to silence him.

In a message to her husband on December 26, Mr. Laurent’s wife, Chantal, wrote to him explaining that she had grown tired of receiving calls from France’s Ministry of Foreign Affairs about his predicament.

In emails prior to his removal, Mr. Laurent also complained to senior officials at Vinci in Paris, French parliamentarians and the Agence des Participations de l’Etat (APE), the main adviser to France’s Ministry of Economy. APE’s current commissioner, David Azema, was president of Cambodia Airports until 2008.

“I no longer participate in board meetings and have stopped receiving reports from these meetings,” Mr. Laurent wrote in an email to Nicolas Notebaert, the president of Vinci Airports, on November 5.

“I am kept in the dark about strategic negotiations such as the project to expand the airports and I am asked to sign contracts blindly without even exerting my right to provide judicial analysis to doubtful content inside contracts,” he wrote.

One contract at the center of Mr. Laurent’s campaign is the October 2012 purchase by Cambodia Airports of an Instrument Landing System (ILS), equipment used to guide planes during takeoff and landing, at the Sihanoukville International Airport. The equipment, costing a modest $839,362, was purchased from the Paris-based French military electronics maker Thales.
According to Mr. Laurent, an ILS system for an airport like the one in Preah Sihanouk province should not have cost as much as it did.

Cambodia Airports bought the equipment on October 11 after a purchase agreement was signed between Emmanuel Menanteau, CEO of Cambodia Airports, and Stefan Motschmann, sales manager for Thales in the Asia Pacific region. The agreement made between Thales and Cambodia Airports states that $360,936 was spent directly on the ILS system, and the remainder of the costs, almost $500,000, was spent on “overheads,” such as test equipment for installation, antennas, a shelter, spare parts, and on-site services commissioned to Thales.

“In any decent management contract you can’t have more extra costs than the principal [purchase],” Mr. Laurent said of the ILS contract. “This is a rule of business…. How could you explain that local costs became higher or similar to the contract itself?”

Mr. Motschmann, the regional sales director for Thales, said the cost of the ILS system showed no discrepancies due to the large amount of additional equipment and services that Cambodia Airports ordered alongside the ILS system.

“[T]he price for all ILS supplied by us to Cambodia has been very competitive. Prices for ILS installation can vary considerably, depending whether the customer only buys the equipment or whether he includes all services like installation, commissioning, electrical equipment (e.g. transformers, power distribution boxes etc) and flight check into the contract,” Mr. Motschmann said in an email. “The latter was the case for the ILS installations in Cambodia, hence the price was higher than for equipment supply.”

Another of Mr. Laurent’s targets is a $4.8 million contract signed on October 2, 2012, for design work for extensions to the terminal buildings at the airports in Phnom Penh and Siem Reap. Work for the redesign was contracted to Vinci Construction Grands Projets Sdn Bhd and MEB Construction Sdn Bhb, which are Malaysia-based subsidiaries of Vinci Group and Muhibbah Masteron, which are the owners of Cambodia Airports.

According to a copy of the design contract provided by Mr. Laurent, payments for the design deal were scheduled between September 15, 2012, and March 30, with the payment for each installment of between $488,750 and $855,312 contracted to take place seven days after receipt of invoice.

Mr. Laurent said that normally, payment schedules dictate money is only transferred 35 to 40 days after receipt of invoice. He also said that he and Cambodia Airports’ chief operating officer Paul Cheung Along were kept in the dark concerning the $4.8 million deal. Mr. Along declined to comment for this article.

In an email to Vinci’s management on March 17, Mr. Laurent also claimed that he refused to sign a contract worth $85 million for the construction work that accompanied the $4.8 million design work to the Phnom Penh and Siem Reap airports because there was no information in the contract about who the money was being paid to and who the legal entity was in the project’s billing.

Cambodia Airports refuted all of Mr. Laurent’s allegations “with the highest firmness.”

“Regarding Philippe Laurent’s allegations, we referred the case to the head office, specifically Vinci’s ethical committee and an investigation has been performed. The ethical committee has concluded that the specific allegation raised by Philippe Laurent is without merit,” Khek Norinda, communications director for Cambodia Airports, said in an email.

“On the other hand, last December 2012, an audit (which was not related to the current case) was conducted by international, reputable and independent auditors and the final report did not show any no-compliance.”

Mr. Norinda said Mr. Laurent had been let go from the company after refusing to take up a new position in Vinci’s Paris office, which is normal procedure for expatriate staff who have spent more than four years in an oversees position.

“He had turned down all the propositions and after failing several times to report to his new position, Vinci proceeded to his dismissal,” Mr. Norinda said. “Against that backdrop, Philippe Laurent started to disseminate hostile, malicious and groundless rumors on our activities in Cambodia. At this point, we are considering to file an official complaint at the court.”
Vinci has not yet sued Mr. Laurent, Mr. Norinda said, as the firm is waiting to see how far his accusations go.

For his part, Mr. Laurent has filed a complaint to the arbitration council in France, which is now evaluating his claims that he was harassed by management at Cambodia Airports, and was then unfairly dismissed.

This is not the first controversy for Vinci, or Thales.

Vinci has recently contended with questions regarding its work on a motorway linking Moscow with Saint Petersburg. In October, Eva Joly, a former presidential candidate for France’s Green Party, accused Vinci of creating “subsidiaries that leave a section of its associates completely in the dark.”

According to Agence France-Presse, Ms. Joly accused Vinci of creating subsidiary companies with its Russian partners that send unknown quantities of money into offshore accounts in Cyprus and Lebanon. Vinci has denied the allegations.

In May 2010, the French defense company Thales was ordered to pay $875 million to the Taiwanese government after the International Court of Arbitration found the company had paid unauthorized commissions to third parties in order to win a $2.5 billion contract to provide six frigates to Taiwan’s navy in the early 1990s. Thales paid the fine in July 2011 after France’s Court of Appeal rejected its petition against the arbitration council’s decision.

The ship purchase investigation was launched after the head of procurement for the Taiwanese navy, Captain Yin Ching-feng, was found floating off the coast of Taiwan in 1993. He is thought to have been on the cusp of blowing the whistle on colleagues who had been part of the ship deal, the BBC reported at the time.

In November 2004, the World Bank announced that an investigation into procurement irregularities in Cambodia concerning a $6.9 million World Bank-financed contract to supply motorcycles to retiring soldiers as part of demobilization efforts found that Thales and other firms had engaged in “multiple misrepresentations of the facts,” and was then banned from receiving World Bank projects for a year.

“Reliance upon these misrepresentations of fact led to an inappropriate contract award to the winning bidder,” the World Bank said at the time.

Mr. Laurent may just be a disgruntled former employee with a grudge to bear. But, his campaign has the attention of the government.

Yim Nolla, chairman of the government’s international airport committee, said that the government was aware of the claims being made by Mr. Laurent, but the government has not received any evidence.

“At the moment it is just a dispute between employees inside the company…. At the moment we cannot say if we are happy or not,” Mr. Nolla said.

Cambodia Airports CEO Emmanuel Menanteau, a one-time employee at Thales, denied all of Mr. Laurent’s allegations.
In a recent interview, Mr. Menanteau discussed in minute detail how an Instrument Landing System (ILS) functions depending on its specification. He also insisted that the price Cambodia Airports paid for the ILS at Sihanoukville, and which infuriated Mr. Laurent when he worked there, was nothing out of the ordinary.

To install ILS systems “it is mandatory to make a flight check,” Mr. Menanteau said, explaining that the flight check was one of the additional costs, inside the ILS contract. “You have to calibrate the ILS to make sure it is perfectly aligned with the runway.”

As for the $4.8 million contract for the redesign of the Phnom Penh and Siem Reap airports, which was contracted to Vinci Construction Grands Projets Sdn Bhd and MEB Construction Sdn Bhd, which are Malaysia-based subsidiaries of Cambodia Airport’s own parent companies, Mr. Menanteau declined to comment for publication on the role of the subsidiaries.

Regarding the redesign contract, however, Mr. Menanteau said “It’s not simple design work.”

“It’s a very complex design where you go very much into detail of your design and when it is completed it’s ready to build,” he explained.

“We are going to build an additional 30,000 square meters of terminal in Phnom Penh and Siem Reap…. We are going to renovate the existing terminal. We are going to make a new facade. We are going to make new facilities. We need to change the traffic flow. It’s a huge project.”

When asked why, after more than four years working at the company, Mr. Laurent would suddenly decide to make his allegations, Mr. Menanteau declined to comment.

Mr. Laurent has filed a complaint alleging unfair dismissal at a labor tribunal in the Parisian department of Hauts-de-Seine, the location of Vinci’s headquarters, and the case is currently being investigated.

With the high-level business dispute beginning to make waves in Paris and Phnom Penh, the French Embassy became involved late last year.

“Without making a decision on the dispute between Mr. Laurent and the management at Vinci, this embassy can only notice that his state of health has become worrying and fears that he can become dangerous to himself and others,” the French Embassy wrote in an internal report on Mr. Laurent, written in December and accidentally sent to Mr. Laurent’s wife.

“In texts, which are sometimes incoherent, he asks for police protection from the embassy, fearing for his security. He believes he is insufficiently protected by this embassy in the face of an organized plot by his local employers, which according to him are all agents of [France’s external intelligence agency],” the report said.

Mr. Laurent is in “a state of psychological distress that is becoming more and more worrying,” it continued.
Mr. Laurent later wrote to the embassy’s first councilor, Dominique Mas, to denounce the report.

“Following the intervention of the French Consulate of Daniel Maizierre, improvising as a Doctor Jekkil or a bogus psychiatrist, I followed his advise of going to an international clinic in order to carry out a proper medical assessment,” Mr. Laurent wrote in an email to Mr. Mas on December 27. “I suffer from no ill health, stress, advanced state of depression or from paranoid behavior.”

Mr. Mas replied on December 28 saying: “I note your decision to no longer need help from the services of this embassy and I can only regret it. I also regret certain hasty interpretations that lead you to believe that you were being followed by agents of this embassy. In a relatively modest shopping city, it occurs that we do our shopping in the same shops. It’s no more complicated than that.”

In an interview, Mr. Mas said he had spoken to Mr. Laurent several times about his situation and that French services were still at his disposal should he need them.

“We are aware of the situation of Philippe Laurent. We are available to provide consular services to Mr. Laurent. Concerning all the rumors and information from Mr. Laurent on the possible embezzlement of funds and acts of corruption etcetera, it is the responsibility of the justice system. It is up to Mr. Laurent, if he wishes, to file documents that show proof of his accusations to either the Cambodian or French justice system,” Mr. Mas said.

Mr. Laurent confirmed he has not made any statement regarding his allegations to French or Cambodian law enforcement, claiming that he is waiting for his unfair dismissal claim to be heard first.

He has, however, asked the Cambodian Interior Ministry for personal protection, claiming that he fears for his safety—or possible forced deportation to France. In France, he has also filed a formal statement with police alleging that he has received verbal threats from management at Vinci and that authorities should be aware of this fact should anything happen to him in Cambodia.

As the back and forth continues, Mr. Laurent’s tone has become more personal, particularly toward embassy officials.

“I will meet you shortly in court because it is going to be necessary to expose your professional cowardliness, you incompetence and all your conniving with the UMP [France’s center-right opposition party], senior managers inside Vinci, the DGSE [Direction Generale de la Securite Exterieure] and the GLNF [Grand Loge Nationale Francaise]…” Mr. Laurent wrote in an email to French Ambassador Serge Mostura and Mr. Mas on March 13.

Mr. Laurent also became agitated by the recent visit to Phnom Penh of Patrick Devedjian, a close adviser to former French President Nicolas Sarkozy and lawmaker for the affluent Hauts-de-Seine region, the same area where Vinci’s headquarters is based.

During his visit to Cambodia, Mr. Devedjian signed a cooperation agreement with Siem Reap province to support projects in agricultural, sanitation and health. He also met with Cabinet Minister Sok An.

For Mr. Laurent, the visit of Mr. Devedjian, who French media have long speculated is a member of the Grand Loge Nationale Francaise Freemasons, though he has denied this claim, is all linked to the airports deal and his campaign.

Mr. Laurent’s story is full of questions, but he appears to have as many supporters that vouch for his claims as he does doubters. Two current and one former Cambodia Airports employees interviewed about Mr. Laurent, speaking on condition of anonymity, vouched for his story and his sanity.

“How come Muhibbah is our contractor and all the major work is going to them?” asked one current staff member who spoke on condition of anonymity for fear of losing his job by commenting on the issue.

With Cambodia Airports’ contract to run for another 27 years, and with tourism the one area of the Cambodian economy assured to see massive growth in that time, and with French and Malaysian companies winning associated lucrative contracts, homegrown business resentment would seem an obvious backdrop to the business environment and Mr. Laurent’s campaign.

What is harder to get answers to are rumors that a power play is under way involving powerful people, local business interests and the exclusive contract to operate the country’s airports.

Prime Minister Hun Sen also announced grand plans last year for a new airport serving Phnom Penh, but based in Kompong Chhnang province. And there have been several reports of companies planning a new airport in Siem Reap.

And, what of Mr. Laurent: Corporate whistleblower? Disgruntled employee with an ax to grind and an imagination to match? Or, possibly, someone entirely different.
While the arbitration court in Hauts-de-Seine will decide on his unfair dismissal case with Vinci, it will not be the first time Mr. Laurent has campaigned against one of France’s multinationals.In 2001, Mr. Laurent appeared in the left-wing newspaper l’Humanite denouncing widespread corruption inside the Thai office of

Bouygues, another massive French construction firm, and his employer at the time.

At the time, Mr. Laurent alleged that large sums of money had gone toward paying off police in Thailand over a sexual abuse complaint filed by a Thai secretary against a French employee of the firm.

It was a story of kickbacks and conspiracies.

“In exchange for not following the complaint, a lieutenant colonel of the local police, a lieutenant general of the [Thai] national police, a judge and a prosecutor see themselves offered a trip to France, which included trips to Paris by night, vineyards in Bordeaux and various golf courses,” the newspaper reported in 2001, based on information from Mr. Laurent.
Mr. Laurent was eventually fired from his position and, in similar fashion to the case with Vinci, entered into a labor dispute with Bouygues.

In court, the lawyer assigned to defend Bouygues refused to talk about the corruption allegations in Thailand and instead portrayed Mr. Laurent as someone trying the make money by entering into a court dispute with his employer. The lawyer also alleged that Mr. Laurent’s psychological state was far from normal.

In response, Mr. Laurent handed the judge a medical document attesting that he possessed no psychological illness.

As it transpired, Bouygues settled their dispute out of court with Mr. Laurent for a sum of money that he would not disclose for this article.

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