KAB aborts plan for Cambodia

KUALA LUMPUR: KURNIA ASIA BHD []'s (KAB) plan to tap into Cambodia's insurance industry has come to a halt after it discontinued a proposed joint venture (JV) with Canadia Investment Holding plc (CIHP) to undertake general and life insurance businesses in the Indochina country.

In an announcement to Bursa Malaysia yesterday, KAB said the board of directors of wholly owned Kurnia Asia Pte Ltd (KAPL) and CIHP had mutually agreed to discontinue with the proposed JV after due deliberation. No reason was given for the decision.

The JV company, Cana Kurnia Insurance plc, was first proposed in April 2008 in which KAPL would have 49% and CIHP the remaining 51% stake. CIHP holds the entire equity interest of Canadia Bank plc, which is one of Cambodia's largest bank in terms of total assets.

At the time of the proposal, KAB had said that the insurance industry in Cambodia was at its infancy stage. With the projected strong growth of the Cambodian economy then, KAB said the JV gave it the opportunity to tap into the insurance industry in Cambodia and to enjoy the potential upside of the industry.

The JV was part of KAB's long-term business strategy to expand geographically.

Subsequently, KAB announced the deferment of the JV in March last year after the downturn of the global economy.