Almajir in Cambodia: Who are GRED?

In the second of my series of reports from what I learned in Phnom Penh, I want to talk about the businesses Vong Pech owns. One of them, Graticity Real Estate Development Ltd own a stake in Birmingham Sports Holdings and provide one of the streams of revenue that the Hong Kong listed company have that isn’t Blues. The big question is though how much money is coming in from Cambodia – and will it ever be enough to potentially help release BCFC from its Hong Kong parent.

Me at One Park

One of the big things that has come about from the #BSHLOUT movement is that while things have certainly improved in Birmingham, there is a continuing unease that all of those improvements could be ruined by an edict from BSH in Hong Kong.

The appointment of Ian Dutton as Managing Director has been nothing but a positive mood – but we are all well aware that Dutton is an employee of the company and that he is ultimately answerable to those in charge in the Far East.

We’ve known for a long time that BSH cannot sell BCFC and keep their stock listing unless they have sufficient business outside of BCFC. This means it’s important for us to understand what else BSH do – and Cambodia is a good place to explore that.

What do BSH own in Cambodia?

Like everything else that BSH seem to be involved in, what BSH own in Cambodia is a bit convoluted and complex; but I will try my best to explain it.

Back in August 2018, BSH announced to the stock exchange that it was acquiring some properties in Cambodia, and to do so it was not paying with money but with shares in BSH.

The company the properties belonged to was Graticity Real Estate Development Ltd (GRED), and so this exchange was how GRED (and thus Vong Pech) became a shareholder in BSH.

BSH didn’t buy the properties though; it merely leased them on a 50-year lease from GRED via a wholly owned Cambodian subsidiary called Deep Blue Trade (Cambodia) Co Ltd.

Just to make it even more complex, using another subsidiary (this time based in the BVI) called Celestial Flame Investments Ltd, BSH was leasing the buildings back to a BVI company called Ever Depot (which is owned by GRED) to manage for them.

There’s a little bit of useful information online about one of these companies online, on the OpenCorporates website.

A search for Deep Blue Trade shows that Qu Shiqin used to be chairman of that company. I’ve mentioned Qu before, as he was connected both to GRED and to a company called Blue Harbor, a Beijing company which was owned by the elusive Mr King aka Wang Yaohui and which built the Solana shopping mall in the Chinese capital.

The current chairman is a guy called Wei Shuai – who is interesting for another reason, which I’ll come back to shortly.

If you’re confused by all this, don’t worry – so was I when I initially read the BSH announcement.

However, the gist of it is that BSH guaranteed themselves some rental income by getting involved in a property development in Cambodia.

The development in question is called One Park, and while in Phnom Penh I visited it.

What is One Park?

One Park is a mixed use (residential and commercial) development in Phnom Penh. It’s situated within an area called “Phnom Penh City Center” and is one of a number of new developments in that area of the Cambodian capital.

The development of this area was fraught by controversy. One Park is built on land that used to be a lake called Boeung Kak, which was filled in from 2008 – 2010. The protests surrounding the upheaval of families was made into a film called “A Cambodian Spring”.

In 2001, the Royal Cambodian Government passed a law that said if you could prove you’d lived on your piece of land for five years, you’d be recognised as the owner. This was essential as most paperwork had been destroyed during the Cambodian Civil War, and it was the only way people could prove they owned their land.

However, the residents of Boeung Kak were denied this. The local government ruling Phnom Penh and a company called Shukaku inc signed a US$79million, 99-year lease agreement for over 133 hectares of prime real estate land which included the lake. Shukaku filled in the lake, and around 1500 families were forced to accept compensation for their homes at well below market value.

Shukaku is owned by a Cambodian Senator named Lao Meng Khin; and he and his wife Sopheap Choeung (also known as Yeay Phu) are one of the richest and most powerful couples within Cambodia. In 2015 they reached an agreement with GRED (who were then described as a Beijing company) to build the first construction on this land.

One Park is now fully built and has people living there – but the takeup rates have not been good.

Estate agents Knight Frank estimate that the project is only 60% sold, while from my own observations and conversations with residents on the site I’d estimate it’s only 25% occupuied.

One Park from a distance

The project itself looks quite nice from a distance, although it’s not surrounded in trees like it is shown in the Knight Frank render. Walking around the exterior, it was easy to see up close that many of the commercial units in the smaller ring of buildings surrounding the development were not in use, and some that had been had evidently closed due to business failing.

The residential section of the development starts from the third floor, and is only accessible by a keycard, so posing as a representative for a rich American investor I visited the main sales office of One Park and managed to get a tour of the complex.

One Park Resort

One Park is laid out almost like a resort; there is a large pool with communal areas for sunbathing and relaxing on the one side of the development, and a high-quality swimming pool on the other side for those who want to exercise. Residents can use one of two gyms within the clubhouse, while there are also restaurant facilities for those who don’t want to cook or who are entertaining.

The apartments themselves are nice; One Park are willing to sell them fully furnished as an additional extra to get people to buy and they are fully set up and ready to go. I was shown a couple of two-bedroom apartments on the 12th floor of a block that is similar to the one leased by BSH.

Price List

The problem One Park has is the price. While US$370,000 isn’t really expensive in our terms, it’s way out of reach of the common Cambodian. That means that these apartments are either for rich Cambodians or foreign (most likely Chinese) investors. Covid has played havoc with attracting foreign investment into Cambodia anyway, and there are many other competing developments in the capital – most of which are cheaper than One Park.

According to the accounts set out by BSH, their buildings in One Park are fully let. One building BSH has leased is the site for the on-site school, which I have seen the exterior of; however I’m not 100% sure which of the residential buildings BSH has an interest in and thus couldn’t tell you if it is fully occupied.

There are also commercial offices in One Park, which have been let to various companies, and a serviced apartment building called Oakwood Premier. These are also interesting to us due to their connections to both Vong Pech and Wang Yaohui.

What companies are based at One Park?

There are a few companies with large offices at One Park, and they are all without exception connected to either Vong Pech, Wang Yaohui or both.

Let’s start with the serviced apartment building, Oakwood Premier. This website I found online confirms that Oakwood Premier is operated by Wondera International Cambodia Co. Ltd.

A search using OpenCorporates shows that company lists one director and one shareholder, Wei Shuai. This is the name I mentioned before at the start of this article in connection with a subsidiary of BSH called Deep Blue.

From my sources in Cambodia, I can report that Wei Shuai’s normal occupation is that of a driver, and that he is Wang Yaohui’s driver in Cambodia. It seems awfully convenient that as well as a driver he’s running two businesses deeply connected to One Park.

However, the connections don’t end there.

APD Bank

On one of the exterior corners of One Park, a new office for Asia Pacific Development Bank is being opened. APD Bank is currently headquartered in Tonle Bassac, not far from the house I revealed in the last article as probably being owned by Vong Pech.

According to their last annual report, APD Bank is owned by Vong Pech and Alex Lau Yao Zhong – who happens to be the son of Senator Lau Meng Khin and Sopheap Choeung. BSH Chairman and BCFC director Zhao Wenqing is still listed as a director of the bank.

Cambodian Natural Gas Corp, another company controlled by Vong Pech in Cambodia is also based in One Park. That company is owned by Sopheap Choeung and a BVI company called Smart City Investments via a Singaporean holding company.

The last remaining office building is owned by South East Asia Telecom Group, who are the subject of my third and final article of this series due to their provable connections to both Wang Yaohui and Vong Pech.

What does all this mean for Birmingham City?

For me, there were two things I took away from my visit to One Park.

The first thing I have confirmed in my own mind is that currently there is no way One Park will ever replace the revenues bought into BSH by Birmingham City.

My understanding from my Hong Kong connections is that the HKSE is wary of Cambodian investments at this moment in time and I can understand why, as what I saw on the ground does not equate to the upbeat talk I hear from people trying to attract investment to BSH.

The second thing it confirmed to me was just how intertwined One Park is with the other businesses operated by Vong Pech in Cambodia, and with the elusive Mr King, Wang Yaohui.

Even while walking around One Park with the polite Chinese saleswoman, I got this impression. She was quite happy to tell me that although the Cambodian boss had his name as owner, it was actually owned by “his brother from Beijing”.

While she might not have got the familial connection right, it does seem obvious to me that Vong Pech is only a front man for Wang Yaohui.

What it comes down to is more questions – and the longer that there is silence from Vong Pech, the more ominous it gets.

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