Laos’ Politically Linked Conglomerates Dominate Its Small Economy
Court disputes and family-linked finance raise governance concerns for investors in Laos.
ST Group’s Prominence and Legal Battles
The ST Group stands out among Laos’ private sector conglomerates. It has been involved in a lengthy arbitration case with Macau-based Sanum Investments, which seems to have ended favorably for ST Group.
ICSID Ruling on Sanum’s Claims
In December last year, the International Centre for Settlement of Investment Disputes (ICSID) dismissed most of Sanum’s claims regarding the 2015 closure of the Ferry Terminal Slot Club, a joint venture with ST Vegas Group. The tribunal awarded Sanum approximately US$3 million in damages.
Previous International Chamber of Commerce Decision
Earlier, in 2023, the International Chamber of Commerce tribunal in Macau ruled that ST Group, including ST Vegas, had violated several agreements with Sanum Investments.
ST Group was then ordered to pay Sanum Investments about US$170 million in damages.
Investor Concerns
The ongoing legal disputes and the prevalence of politically connected family finance highlight significant governance risks in Laos’ economic landscape.
Author’s summary: The dominance of politically linked conglomerates like ST Group in Laos, coupled with ongoing legal conflicts, underscores critical governance challenges for investors in the country.