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Pyramid Scheme Leaves Lao Investors in the Lurch

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An agricultural company running a pyramid scheme in Laos has defaulted on millions of U.S. dollars owed to its stakeholders, leading observers to question why the government has failed to adequately regulate the market and inform investors about potential pitfalls.

The PS Agriculture and Industry Promotion Import-Export Company of Laos 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.

PS Agriculture’s fund grew to include more than 200,000 investors with deposits worth more than 900 billion kip (U.S. $109.3 million), but after the government issued a warning at the end of last year calling the investment scheme illegal because the company was not registered as a financial firm, stakeholders began to withdraw their money.

The company ceased providing promised interest payments in January this year and as more investors sought to withdraw their capital, they found it had been used to build infrastructure and attract new deposits through high rates of return, leaving them little recourse. Currently, only around 50,000 investors remain with PS Agriculture.

One investor in the capital Vientiane told RFA’s Lao Service Tuesday that she had unwittingly bilked friends and family out of millions of U.S. dollars by urging them to invest in the fund, and said it was unclear if they would ever see their money again.

“At first, I was getting paid around six percent interest on my total capital, so I persuaded my friends and family to invest a total of 50 billion kip (U.S. $6.07 million),” said the investor, who spoke on condition of anonymity.

“We received interest up until January 2017, but after that, the company didn’t pay us, so our group decided to withdraw the investment when our one-year contract was completed this month. Now, the company says it has no money … [and instead will] provide us with drinking water to sell.”

Another stakeholder confirmed that PS Agriculture currently has no way of repaying investors because its liquid assets had been tied up in infrastructure expansion.

“The company used the money to build a purified drinking water plant, vegetable and chicken farms, and other facilities,” he said, asking to remain unnamed.

Sources also acknowledged that investors were to blame for pursuing what they saw as a get-rich-quick scheme, without fully researching how PS Agriculture’s expansion fund operated.

Four other stakeholders told RFA that the majority of people 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.”

In a statement released on YouTube earlier this month, PS Agriculture president Por Her claimed that “problems have occurred because Lao people do not understand marketing strategy, and only join [with investments] according to popular trends.”

“The company will try to adjust and change [its policy], and slowly pay money to our customers according to principles, contracts and schedule, and [we] ensure that no one will lose money,” he said in the video statement.

Extension request

Currently, PS Agriculture owes its investors around 100 million kip (U.S. $12.14 million), and while the Bank of the Lao PDR—the Central Bank—issued a notice early this month ordering that the debt be repaid by July 6, company officials have requested an extension, saying it will not be possible.

On June 9, Por Her told RFA that his company is still willing to pay overdue “dividends” to its investors, but said it would take time, suggesting that profits for shareholders were based on PS Agriculture’s performance, rather than a fixed interest rate.

“We have already requested an extension from [the Central Bank] for paying investors back,” he said.

“For those who still have money deposited with us, know that we will gradually sell our products, maintain our business, and pay you back. And for those who are unhappy they can still withdraw, right? But to asking us to pay them back in one month is something that cannot be done.”

The same day, the PS Agriculture president published an audio clip to the website Tholakong.com telling investors that “whenever I can make money, you can be paid back,” adding that the company “has to operate in order to make you money.”

“Frankly, if you will come to withdraw the capital in three months, we will have nothing to give you except my bones,” he said.

On Tuesday, PS Agriculture’s chairman Souknaly Thepsymueang was called for questioning by the National Assembly’s Justice Committee as part of an investigation into the company’s activities, during which some 10 investors delivered a petition calling on lawmakers to resolve the situation.

It was not immediately clear what action the committee plans to take, if any.

Pyramid scheme

A Laos-based legal expert told RFA that PS Agriculture’s product line served merely as a front used to “trick” the public into contributing funds, and called on the government to do more to monitor the investment market to prevent similar scams in the future.

“The company operates its business by taking money from one person and paying it as interest to another,” he said.

“To do so, team leaders work as brokers, hunting for innocent investors as victims. Once they find investors, they are paid higher commissions and interest. The operation is a scam.”

The legal expert said PS Agriculture is just one example among “many cases” of pyramid schemes in Laos.

“The problem is that no economists or relevant government officials are taking serious action aimed at prevention or ensuring the public has access to information [that would protect them from scams],” he said.

In August last year, the Lao Securities Commission Office advised the public that depositing money with companies promising higher return rates than banks put them at risk of losing their savings if the firm goes belly up, according to a report by the Vientiane Times, adding that it will not be held responsible in such case, even if the company has legally registered its operations in Laos.

In 2015, investors lost more than U.S. $15 million in a pyramid scheme run by Malaysian company Lao Maxkey-Stable Limited. The government forced the company to cease operations and opened an investigation into the company’s business practices, leading to the arrest of five people.

Reported by RFA’s Lao Service. Translated by Ounkeo Souksavanh. Written in English by Joshua Lipes.

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Asian

North Korea Targets Potential Illegal Cell Phone Users With Links to Defectors

North Korean leader Kim Jong Un has ordered authorities in the isolated, communist state to expand a crackdown on illegal cell phone use to cover citizens who have links to defectors in South Korea, sources familiar with the situation said.

In the past, authorities targeted only actual cell phone users and sent them to a political prison camp if they were found to have connections in South Korea, they said.

North Korea’s Ministry of State Security has now extended the crackdown to include cell phone users who might potentially use Chinese-made mobile phones to call defectors, they said.

Jiro Ishimaru, a North Korea expert representing the Osaka, Japan-based AsiaPress International, told RFA that the news agency’s source in the northern part of North Korean said authorities began enforcing a more extensive crackdown in May after Kim Jong Un decided to “root out Chinese-manufactured cell phone users” who have links to the country’s mortal enemy South Korea.

When the original crackdown on illegal cell phone use was rolled out in late 2000 after a dramatic increase in the number of mobile calls in the border areas, those who used the devices illegally were subject to investigation.

But now potential cell phone users are being investigated, and authorities are meting out harsher punishments for offenders, said Ishimaru, who edits Rimjingang, a publication that coves North Korean news.

The Ministry of State Security is specifically targeting North Koreans whose families include defectors, and who have had used Chinese cell phones in the past, he said.

Authorities are trying to force these individuals along with people who spend more than they earn to turn themselves in and blow the whistle on others for making illegal calls, he said.

Though the Ministry of State Security already has information on those who use Chinese cell phones illegally, state security agents and officers are now visiting every household to pressure people to inform on neighbors they suspect of using mobile phones, Ishimaru said.

He said the current crackdown on cell phone users is harsher than clampdowns in the past.

“According to a source, it is on a totally different level now,” Ishimaru said. “Though people have not made any phone calls, they are being visited by investigators to find out if they have family members who have defected to South Korea.”

“There are plenty of security agents who are conducting investigations,” he said. “It seems like they are intensifying the crackdown to include not only actual phone users, but also potential cell phone users. This means there are stricter regulations.”

‘No forgiveness’

The number of North Koreans caught illegally using cell phones is increasing as a result of the widened crackdown.

Ishimaru’s source said residents accused of illegally using cell phones are subject to intense scrutiny and sent to political prison camps if they are found to have any links to South Korea.

“There is a person who got caught for giving information about market prices to families in South Korea,” the AsiaPress’ source said. “It will be difficult to get him freed despite all his family’s efforts.”

“There is no forgiveness for the ones who have been in contact with anyone in South Korea, so once someone gets caught, it means the end for that person,” the source said.

Ishimaru noted that the crackdown includes many North Koreans who live near the Chinese border and use Chinese-made cell phones to call relatives in China, though they are not phoning South Korea.

This is because many of the family members of North Koreans who have defected to South Korea live near the Chinese border, he said.

“North Korea is cracking down on potential users among them and treating them like political criminals no matter what their phone conversation was about,” Ishimaru said.

“The purpose of North Korea’s crackdown is to find the ones who are leaking internal information to South Korea or other countries,” he said.

“Kim Jong Un considers people who make calls to China to be on ‘a South Korean mission’ and has issued direct orders to block ‘illegal phone use’ and to prevent ‘information leakages,’” Ishimaru said.

North Koreans’ use of cell phones to keep in touch with relatives living in South Korea has dramatically increased in recent years, with security agents scrambling and failing to control and shut down communications links, North Korean sources told RFA in May.

Those caught using an illegal cell phones to call their relatives in South Korea usually receive sentences of three to seven years in prison, according to a North Korean source who spoke to RFA on condition of anonymity in November 2015.

The demand for Chinese-manufactured phones has grown in sanctions-hit North Korea because the devices can handle both domestic and international calls as well as send text messages, two sources in North Hamgyong province near the border with China told RFA in May.

North Korean security agents are hunting down cell-phone users in remote areas along the border with China where signals are not jammed, one of the sources said, adding that prohibited calls can be easily made from Chinese-manufactured phones using USIM chips which can access 3G networks.

Reported by Jung Min Noh for RFA’s Korean Service. Translated by Leejin Jun. Written in English by Roseanne Gerin.

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Asian

Hundreds Flee Mining Area in Myanmar’s Kachin State to Comply With Army Evacuation Order

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About 400 people who work in the Tanaing gold and amber mining region of northern Myanmar’s Kachin state arrived on Tuesday night in the town of Hkamti to comply with a national military order to evacuate the resource-rich area by June 15, local officials said.

The Myanmar army dropped warning letters by helicopter in the region on June 5, telling mine workers and others living there to leave by mid-June to make way for a clearance operation following a new round of fighting with the Kachin Independence Army (KIA), an ethnic militia, that began two days earlier.

The fliers warned that if residents failed to leave the area by June 15, the military would consider them to have connections to the KIA, sources told RFA’s Myanmar Service on June 7.

A total of 5,000 resident and mine workers who had migrated to the mining area from other parts of Myanmar have left the area and are staying temporarily on ships and boats and in guesthouses as they make their way back to their hometowns in Homalin, Mawlaik, Paungbyin, Minkin, Katha, and Mandalay, local officials said.

They are also staying elsewhere in Tanaing township in Kachin state’s Myitkyina district, they said.

“More than 300 people on five boats arrived in Hkamti between 7 p.m. and 10 p.m. last night,” said Thuta Soe, deputy director of Hkamti’s Relief and Resettlement Department. “They stayed at guesthouses and on ships and will continue to travel to their hometowns in the morning. The boats have to dock overnight in Hkamti because they can’t be operated at night.”

Sa Willi France, director of the Relief and Resettlement Department, said 370 people from the Tanaing gold and amber region arrived in Hkamti on Tuesday night.

“Some of them have returned to their hometowns, and more will arrive in Hkamti tonight,” he told RFA’s Myanmar Service. “We arranged for them to stay overnight in two monasteries, but they didn’t stay there.”

Instead, they stayed on ships that travel daily between Hkamti and Monywa in northwestern Myanmar’s Sagaing region, he said.

Hundreds of other people fled the mining area last week and sought shelter in Christian churches and Buddhist monasteries.

Not only migrant workers, but also local businesses and the KIA are dependent on the region’s amber and gold mining activities as a source of income.

Reported by Thiri Min Zin for RFA’s Myanmar Service. Translated by Khet Mar. Written in English by Roseann Gerin.

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Indian

CARE: Change of Company Name

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CARE: Change of Company Name CARE has informed that the Registrar of Companies have approved the change of name of the Company from Credit Analysis and Research Limited to #39;CARE Ratings Limited#39; and has issued the fresh certificate of incorporation with the change in name to the Company.

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Indian

Esaar (India): Outcome of Board Meeting

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Esaar (India): Outcome of Board Meeting Esaar (India) has informed that the meeting of the Board of Directors of the company was held on Wednesday 14th June, 2017 and approved the appointment of Ms. Khushboo Jain as the company secretary and compliance officer of the company w.e.f. 10/06/2017.

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