Intrigue surrounds Agribank’s sale of AJC

Agribank has required its ownership representative at Agribank Gold Corporation (AJC) to outline a plan to divest itself entirely from AJC, according to reliable sources. 

However, an AJC executive, speaking to VIR on terms of anonymity, revealed that AJC has tried to resist the deal. “AJC proposed that Agribank divest just 25.25 per cent of its commanding 61.25 per cent stake in AJC, retaining a 36 per cent decision-making stake until 2015 when they could divest entirely,” the executive said.

With AJC currently holding the domestic and foreign currency deposits of Agribank, as well as overdue gold deposits totalling 12,921 taels of SJC and AAA gold bars, many at AJC are perturbed by the deal.

“If Agribank divests 100 per cent, then how will payment for those deposits be made?” said the AJC executive, “I believe the state must retain at least 36 per cent of the charter capital at AJC to resolve the issue of previous gold deposits. This way they can ensure the protection of customers rights.”

Agribank leaders were unavailable for comment when contacted by VIR last week.

The AJC executive added that while many other banks were asking for permission to trade gold, Agribank’s move to sell the gold trader seemed counterintuitive.

As the State Bank tightens the bullion market, fewer firms are being allowed to sell gold. Through AJC, Agribank currently has the largest network of gold traders in the country, primarily in rural locations. The sale of AJC would leave plenty of room for others to enter the sector.

Agribank is undergoing restructuring and divesting from some member companies. “But divesting from gold business is not reasonable as gold is not a bank’s non-core business,” noted the AJC executive.

The lack of motive on Agribank’s part has led many observers to speculate that Agribank leaders are being lobbied by some investors seeking to take over Agribank’s stake at AJC. SeABank, HDBank, TPBank, Doji Group and Muong Thanh Group have all been linked to a desire to buy shares in AJC.

Key among them is the Muong Thanh Group which has the strongest capital reserves. The group established the Muong Thanh Gold and Financial Investment Company, but despite huge financial strength, they still lack a competent network and widely-known brand name. Muong Thanh was not available for comment on the sale of AJC when approached for comment last week by VIR.

Agribank Gold Corporation (AJC)

- Currently holds VND662 trillion ($31.5 billion), $3.76 million and €90,541 of Agribank’s local and foreign currency reserves.

- Total chartered capital of VND206 billion ($9.8 million).

- Largest stakeholder is Agribank with a 61.25 per cent stake.

- Second largest shareholder is SeABank, with a 10 per cent stake, which rises to 30 per cent when subsidiaries of the bank are taken into consideration.