Royal Connections

ThedealLOGOBack then, he was a skinny little kid, looking for his family in the wasteland of Khmer Rouge devastation. He had been forcibly separated from his parents in a distant commune years before, later discovering they had starved to death. After the fall of the brutal regime, in the confusion and desperation of those early months of freedom, he and his older brother somehow made it back to Phnom Penh. It was 1980. Kith Meng was maybe 11 years old.

Thirty years later, with a decade living, learning and working in Australia under his belt, followed by a meteoric business ascent in Cambodia, Kith Meng is a power to be reckoned with in Phnom Penh.

Chairman and CEO of the Royal Group, the largest privately owned conglomerate in Cambodia, he has his fingers in many of the nation’s growth industries – fast food, insurance, television, telecommunications, a luxury hotel, the railway, a bank. His Royal Group has recently negotiated a US$591 million loan from a Chinese bank to restructure debt and buy new technology. On paper he is a multi-millionaire, possibly even a billionaire. He has the ear of Cambodia’s famously xenophobic and strong-arm prime minister, Hun Sen. He owns a Rolls Royce phantom.

Everyone knows him. At Phnom Penh’s Intercontinental hotel his name is enough; staff rush off to find him sitting on one of the lobby lounge’s luxuriously padded sofas. Kith Meng smiles. It is a small and wary smile. He has had run-ins with the western press before, and he has delayed this particular interview for days.

Slight, and beautifully dressed in a white shirt, navy suit and polished black shoes, he is courteous and affable. Yet he has been viciously uprooted not once, but many times. He was a little boy when the ultra-Maoist Khmer Rouge sociopaths came to power and decided to force all bureaucrats and entrepreneurs, clerks and educators, officials and technocrats, out of their offices and into the countryside with the idea of setting up some form of agrarian utopia. Arbitrary executions and torture were routine. During the Khmer Rouge rule about 1.7 million people, or one-fifth of the population, were killed, or died of starvation, overwork, or untreated maladies.

From the day he was born in September 1968, Kith Meng’s life was shadowed by civil war. By 1975, the rebels had taken Phnom Penh and the years of Khmer Rouge rule had begun. Kith Meng’s father, Kith Peng Ike, was a class enemy, a well-to-do and successful businessman; feared, despised and targeted by the communists ruling Cambodia.

The youngest of several children, Kith Meng says he remembers being shunted out of his home in Kandal province, near Phnom Penh, in 1975 and, with his mother and father, being forced to walk 300 kilometres across Cambodia. Once they reached their designated commune, the family was separated. Kith Meng shrugs. “The parents go with the parents, the children with the children. We were split up.”

After the regime in fell in 1980, the newly orphaned Kith Meng and his slightly older brother Kith Thieng, now vice-president of the Royal Group, first made their made their way to Phnom Penh, and then, running from the madness, to Poipet on the Thai border. “They put us in a pig farm at Suan Plu,” he says, shaking his head. “We slept with the pigs. At that time we no longer existed; we had no state, nothing.”

The boys were later transferred by UN High Commissioner for Refugees organisation to Khao-I-Dang camp; at the end of 1980, they were finally found and brought to Australia by their elder brother, Sophan Kith, who had been living in Canberra. Kith Meng went to Melba secondary school in the outer suburbs of Canberra, where life wasn’t easy for a Cambodian boy with little English. He soon began working at part-time jobs.

“In Canberra, it’s very cold. You have to deliver pamphlets to earn your living; to letterboxes; you walk. You feel you are very alone. I worked for an Indian restaurant as the dishwasher. I cleaned a fruit-market on Sundays. I mowed lawns to earn my living.” Today he has Australian citizenship, a house in Canberra, and relatives living there. He visits occasionally.

His older brother, Sophan Kith, returned to Cambodia, and in 1991 Kith Meng and Kith Thieng joined him, and began work, firstly with contracts catering for the UN and a franchise to sell Canon copiers. Sophan Kith died within a couple of years, of hepatitis.

So, still in his 20s, Kith Meng, with the help of Kith Thieng, took control of the Royal Group and spent long years pushing it to its current dominance. Now the president of the Cambodian Chamber of Commerce, he carries the title “Neak Okhna”, granted by royal decree to generous donors. He works long hours and rarely has a holiday, preferring to concentrate on business. Not formally married, he is known as a sharp and sometimes ruthless businessman, an early mover and a risk-taker, and an operator who takes full advantage of his close connection to the government led by the immovable strongman prime minister Hun Sen.

Screen Shot 2013-03-29 at 11.32.06 AMThese days, Cambodia is considered to have significant business potential. Nearly three decades of civil war and the Khmer Rouge insanity have taken their toll, but entrepreneurs appreciate Cambodia’s ease of doing business, the liberal trading regime, and the reasonable political stability. Cambodia is part of the international community, a member of ASEAN. It has joined the World Trade Organisation.

Yet there are significant drawbacks. Infrastructure is minimal, and Cambodia ranks equal 154 of 178 in Transparency International’s 2010 corruption perceptions index – indicating graft is deeply entrenched. Kith Meng says Cambodia has a different culture, and anyway the term ‘corruption’ is difficult to define. “You have to remember that Cambodia is recently developed,” he points out. “Before, there were problems with the formation of government. And the Australian government is not really stable.” Referring to the independent MPs backing Julia Gillard’s government, he says: “You have those two guys who can point a gun at her [Gillard’s] head all the time.”

The Royal Group has a joint venture with the Australian behemoth Toll Holdings, called Toll Royal, which last year won the concession to run the Cambodian railways, and another joint venture with ANZ bank, named ANZ Royal, which has been flourishing in Cambodia for five years. The Royal Group is the junior partner in both cases, and no-one from either firm will talk about Kith Meng personally. Some businessmen in Cambodia, particularly those who have had run-ins with him, won’t discuss him under any circumstances.

Ou Virak will, though, and in no uncertain terms. The president of the Cambodian Center for Human Rights is a courageous man, and in the past he has tried to negotiate with Kith Meng and the Royal Group to prevent Cambodians being thrown out of their homes on newly-purchased land. “He’s a cutthroat business operator,” he says. “That’s the reality. He doesn’t entertain any of the suggestions we make about respecting people’s rights.

“He’s quick on his feet, trying to do many, many things at the same time. He’s very aggressive, he’s stamped on many people’s toes, and probably worse than that. I think it’s fair to say his connection with Hun Sen and the government is not just friendly relations. There are business interests in being close to the government.”

Cambodians who are in the way of new developments are not evicted by private armies, Ou Virak says, adding that most of the squatters have already been thrown out by police or other official security forces – it’s a sort of package deal. Buy the land (and there is often corruption involved, he explains), and the evictions come free. Land title can be nebulous in Cambodia, where the long civil war and Khmer Rouge rule eroded undocumented claims of ownership, and an epidemic of “land grabs” in recent years has dismayed international observers.

Ou Virak remembers, particularly, 150 or so families in the abandoned Preah Monivong hospital, most of whom had been living there for decades. He says the government sold the land to the Royal Group for development. In 2006, electricity and water were disconnected and the Ministry of Interior sent in more than 200 security personnel equipped with arms, tear-gas, guns, electric shock batons and shields to force the families out. Like others, Ou Virak thought the evictions were illegal, and the families were the rightful owners of the land.

“Kith Meng is one of those people who doesn’t look around, he’s willing to do what he has to do to get what he wants,” Ou Virak says. “He doesn’t hesitate.”

Observers point to various opaque deals the Royal Group has under way – including the concession to develop a multi-million dollar resort on a pristine island. The rumours regarding the source of Royal Group’s capital are widespread, and many note Kith Meng’s close relations with Hun Sen, the prime minister who has a headlock on power in Cambodia.

Hun Sen, while paying lip service to the notion of elections, has made very sure the hounded and belittled opposition will never come close to winning anything much. He has managed to hold power – or shared power – since 1993, repelling all who seek to replace him. The now-exiled Cambodian politician Sam Rainsy accused Hun Sen of sending his bodyguards to attack an opposition party rally in 1997: at least 16 people were killed and 100 wounded (including one American) when grenades were thrown into the crowd. Rainsy was injured. His bodyguard was killed. The FBI investigated, and in a report which was subsequently leaked to the press, pinned the blame on Hun Sen’s bodyguards.

Kith Meng agrees he often travels with Hun Sen, representing Cambodia’s interests abroad, but the suggestion he sits in on cabinet meetings makes him laugh. He denies has much influence with the prime minister – “no, I’m just a businessman”.

“He knows me, I know him,” he says. “He’s the leader of the country, of course we must know him and respect him.” The notion that he, Kith Meng, might one day stand for office makes him laugh again. “No, I like what I’m doing, I’m happy with what I’m doing. Leave politics to the politicians; that’s the best way.”

As someone who suffered cruelly at the hands of the Khmer Rouge, Kith Meng is philosophical about the cycle of revenge and justice. “We must learn from the mistakes, correct the mistakes and keep that history alive,” he says. “In Cambodia, nobody knew that the Khmer Rouge would do that. Why would you drive people out from the streets? That’s not a regime. You can’t wear white, you have to wear black clothes, wear black shoes made from tyres. It was a mistake in history.”

He prefers to look forward, to a booming and bustling Cambodia, with solid economic growth, a thriving business community and a prosperous and harmonious population. A Cambodia which –with the help of the Royal Group – provides the convenience of sky-blue ANZ Royal automatic teller machines; gleaming Kentucky Fried Chicken outlets complete with wifi; an extensive Mobitel mobile telephone network, and a smoothly functioning railway, administered by Toll Royal, to underpin flourishing domestic and international trade.

Kith Meng smiles again. “I feel that I have contributed something to the country and the people,” he says. “I’m proud of what I have achieved here, to be able to develop a company that gives jobs to the people. If both of my parents were here, they would be happy.”