Workers collect rubber latex at Tan Loi Rubber Farm in Binh Phuoc province (Photo: VNA) Hanoi (VNA) - Prime Minister Nguyen Xuan Phuc asked the Ministry ofPublic Security (MPS) to handle suspected financial violations by the VietnamRubber Group (VRG) prior to the company’s intended initial public offering.
The Government Inspectorate (GI) conducted an inspection in 2014, but the PrimeMinister’s directive indicates this inspection was inadequate. Accordingly, theMPS is required to investigate the accuracy of VRG’s financial reports andliabilities disclosure, as well as the GI’s investigation results, beforeJanuary 1, 2018.
The GI will also have to revise and amend their 2014 inspection results on theVRG’s collective liability, titled 2341/KL-TTCP, and submit a new report to theGovernment by February 1, 2018.
The VRG will have to report to the Government on alleged misconduct by July2018, including violations relating to capital, property and land use by theVRG and its affiliates from 2012 to 2017.
According to the GI’s 2014 inspection report on the VRG and its member units,doubts arose on the company’s sudden increase in charter capital in 2010 and2011; long-term financial investment inside and outside its main businessfields; and construction investment and land management projects undertakenwithout the correct procedures.
From 2010 to 2011, VRG increased charter capital at four of its membercompanies by 1 trillion VND (44.5 million USD) and increased chartered capitalat companies outside its primary field of operation, supporting hydropower,cement and steel companies over the allowed limit by 2.59 trillion VND (115.2million USD).
It also made long-term financial investments of 133.1 billion VND (5.9 millionUSD) outside its main field of business and bank loans repayments of 120.6billion VND (5.3 billion USD).
The GI pointed out a series of shortcomings at the VRG during the period from2006 to 2011. Specifically, the VRG Council decided to increase charter capitalin 2010 and 2011 for VRG and member units before receiving approval from thePrime Minister.
Last month, Tran Ngoc Thuan, VRG Director, confirmed that the company will auctionoff 475 million shares, equivalent to 11.88 percent of its total chartercapital of 40 trillion VND (1.76 billion USD) to the public, no later than thefirst quarter of 2018.
Another 475 million shares will be offered to strategic investors while theremainder of offloaded shares will be sold to the group’s employees and tradeunion.
The State will retain three billion shares or 75 percent of VRG’s charter capitalafter equitisation.
Thuan said the company has proposed to the PM a selling price of 13,000 VND (0.57USD) per share on the HCM Stock Exchange.
Ha Cong Tuan, Deputy Minister of Agriculture and Rural Development, said at apress conference in November that the delay in VRG’s shares offering was due tounresolved issues regarding land use.
Since its establishment in 2007, VRG has been regarded as ineffective, plaguedby continuous losses, misappropriated loans and over 253 billion VND (112.5million USD) in accumulated debts.-VNA
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