PHNOM PENH, Cambodia — The sale of Camko City, one of the largest non-performing assets linked to South Korea’s Busan Savings Bank scandal, has shown little progress despite more than a year of efforts by the Korea Deposit Insurance Corporation (KDIC) to recover public funds.

According to financial industry sources on May 29, the head of KDIC’s Phnom Penh office recently reported on the status of the Camko City project during a board meeting. KDIC established its Phnom Penh office in 2017 to oversee and manage related assets. In February 2025, the corporation appointed Samil PwC as the lead sales advisor and BKL (Lee & Ko) as legal counsel, formally launching the asset disposal process.

However, no significant breakthrough has yet been achieved.

A KDIC official stated, “As this is an overseas asset, we are closely coordinating with the Cambodian government while taking local circumstances into consideration. Since appointing the advisory firms, we have continued with follow-up procedures and are actively exploring ways to secure potential buyers.”

Camko City is a large-scale urban development project located on the outskirts of Phnom Penh, designed to include commercial, residential, and mixed-use facilities. To finance the development, project developer World City obtained loans totaling KRW 236.9 billion (approximately USD 170 million) from Busan Savings Bank alone.

The project encountered serious difficulties due to sluggish property sales and worsening market conditions, ultimately failing to repay its loans. The resulting project financing (PF) losses became a major contributor to the collapse of Busan Savings Bank and several other savings banks, including Tomato Savings Bank and Prime Savings Bank, between 2011 and 2012.

At the time, approximately 40,000 investors and depositors suffered losses after holding deposits exceeding the government protection limit or investing in subordinated bonds. Including principal and 14 years of accumulated default interest, the amount KDIC is seeking to recover is estimated to exceed KRW 700 billion.

While asset disposal remains essential for maximizing recovery, several obstacles continue to complicate the process.

The Camko City project is linked to Cambodian government-led infrastructure and urban development initiatives, requiring careful consideration of bilateral relations between South Korea and Cambodia. In addition, local legal and administrative procedures present further challenges.

Market participants also point to Cambodia’s corporate ownership regulations as a potential hurdle. Under local requirements, Cambodian nationals must hold a majority stake in certain locally established entities, meaning the cooperation of local shareholders can significantly influence asset disposal efforts.

Furthermore, Cambodia’s real estate market has relatively limited experience with large-scale public auction sales, making it more difficult to attract institutional investors for a project of Camko City’s size.

Analysts also note that recent developments, including the exposure of large online scam compounds in Cambodia and heightened tensions along the Cambodia–Thailand border, may have weakened investor confidence.

As a result of these complex factors, the recovery rate of public funds injected into Busan Savings Bank and Tomato Savings Bank remains relatively low, standing at 23.4 percent and 31.9 percent, respectively, as of the end of last year.

Of the KRW 27.2 trillion in public funds deployed following Korea’s savings bank crisis, KDIC had recovered KRW 14.3 trillion by the end of 2025, representing a recovery rate of 52.6 percent.

A KDIC representative said, “We are working closely with our Phnom Penh office to recover overseas assets, including those located in Cambodia. Through close cooperation with local authorities and legal advisors, we will continue addressing legal and administrative issues while developing disposal strategies that reflect local market conditions.”

Sale of Cambodia’s Camko City Assets Stalls as Korea’s Deposit Insurance Corporation Faces Recovery Challenges

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