Lao People's Democratic Republic: Alleged to Be Unsafe For Foreign Investment
, Aug. 15, 2012 /PRNewswire-Asia/ -- Today Lao Holdings N.V. and its wholly-owned subsidiary, Sanum Investments Limited, both filed suit against the Government of the Lao People's Democratic Republic to stop the illegal taking of a US$400 million investment by the Government of Lao. The claims will be handled by the World Bank's International Center for the Settlement of Investment Disputes using treaties signed by Lao in which it promised to protect foreign investment.
"We invested in good faith in the Lao PDR.We believed the former Prime Minister when he told us the Lao Government would uphold the rule of law.We established a profitable business that created thousands of jobs for the Lao people," said Jody Jordahl, President of Sanum."As we became more successful, they moved in to take it from us.This is a simple case of a government breaking its promise to protect foreign investors against greed and exploitation."
These assets were established by means of the direct investment of over US$85 million made in the country by Sanum Investments.According to Mr. Jordahl, today that investment is worth at least US$400 million.
Sanum Investments was enticed to invest in the Lao PDR on the basis of the government's promises of a safe and stable economic and legal environment, where foreign investments were promised protection and security through steadfast adherence by local officials to the rule of law.The investment was made approximately five years ago. Now Sanum alleges that the government has turned on the company, using all the governmental tools at hand to expropriate Sanum's investments.
One example of the government's misconduct is the way both its judicial branch and its tax authorities have taken actions to allow a well-connected Lao family and their companies to seize control of Sanum's prize asset, the Thanaleng Slot Machine Club, which is located close to the Lao capital, Vientiane, near the foot of the Lao-Thai "Friendship Bridge No. 1."Lao Holdings is losing US$1.8 million every month that this taking is allowed to stand, according to Mr. Jordahl.
Lao PDR's alleged illegal acts are in violation of multiple treaties and include:
