Illustrative image (Photo: dauthuanvien.blogspot.com)

Hanoi (VNA) – The wrongdoings in State-owned Mobifone’s acquisition of the Audio Visual Global Joint Stock Company (AVG) are attracting public attention, with wide expectations that the case should be handled strictly and lost State asset must be recovered.

Inspection of the acquisition was launched in September 2016, but due to the complicated nature and seriousness of the deal, the Government Inspectorate (GI) only released conclusion on the inspection outcomes on March 14.

Mobifone’s purchase of 95 percent of AVG was a major deal between a State-owned enterprise and a private company, but what made it come under spotlight was the lack of transparency. In the first quarter of 2016, Mobifone announced the decision to buy 95 percent of AVG, but did not disclose the value of the transaction. The company’s leadership refused to answer the press on this question, claiming that it was classified information. The case was raised repeatedly at the National Assembly and many press conferences after the Cabinet’s regular meetings.

“Which were the needs and basis for Mobifone to use State capital to buy AVG? How much was the real value of the acquisition? How did the AVG operate after the acquisition and did the business outcome match the investment?”, were the questions posed by Le Thanh Van, standing member of the NA’s Committee on Financial-Budgetary Affairs, at the 4th session of the 14th NA in November 2017.

The answer to those questions came in the GI’s conclusion released on March 14. The GI stressed that this is a very serious economic case, with real risk of great damage worth over 7 trillion VND to State capital at Mobifone. The damage included 1.134 trillion VND worth of AVG’s debt.

The obscure deal has made a negative impact on the image of Mobifone, reducing the value of its shares during the equitisation process.

It can be seen through the case that the lack of transparency in State-owned enterprises’ operation will pose big risks of causing losses and wastefulness of State resources.

The inspection of the case has been made under the close and drastic instruction of the Party and the Government towards an accurate final conclusion in line with the law while preserving the firm’s value and maintaining the operation of a large-scale SOE during preparation for equitisation.

At the 12th meeting of the Central Steering Committee for Corruption Prevention and Fight, Party General Secretary and head of the committee Nguyen Phu Trong requested urgent inspection and early conclusion, along with clarification of the causes and responsibilities of involved persons in nine major loss-making projects of public concern, including the Mobifone’s acquisition of AVG.

Recently, the Party Central Committee Secretariat asked the Government standing board to instruct relevant agencies to quickly handle the case in an objective and accurate manner in line with the Party’s guidelines and State laws, to ensure that punishment is given to the right person and lost State assets are revoked.

In the newly announced conclusion of the Mobifone case, the GI not only made clear law violations in the transaction but also clarified the responsibilities of related agencies and proposed measures and tasks to deal with the violations, in both administrative and economic terms.  

Among the measures, the GI recommended recovering the amount of money that Mobifone had paid for the acquisition of a 95 percent stake of AVG, enforcing decisions on the case issued by relevant agencies, and collecting 1.3 billion VND in corporate income tax arrears from Mobifone, among others.  

The clear conclusion on the violation, along with directions for strict handling of the case demonstrated the determination of the Party and the State in tightening discipline and rules, enhancing publicity and transparency, and in fighting negative phenomena, corruption and wastefulness, thus creating a healthy and stable environment for the sustainable development of the national economy.-VNA