Minh Phu Seafood shares fall on investigation of tax evasion

Shrimp processing at MInh Phu Seafood Corporation.–Photo tienphong.vn

The statement was made after international and local media last weekend reported the US Customs and Border Protection (CBP) had launched an investigation into whether MSeafood, a US division of Minh Phu Seafood, violated US trade laws by evading anti-dumping taxes on frozen warmwater shrimp from India.

A report on undercurrentnews.com on January 16 said the CBP had sent a letter to MSeafood Corporation, located in Fountain Valley, California, regarding the initiation of investigation and interim measures.

In the letter, the CBP’s acting director of Trade Remedy and Law Enforcement Directorate informed Minh Phu Seafood chairman Le Van Quang about the formal investigation as the CBP had found evidence that “supports a reasonable suspicion that MSeafood entered covered merchandise into the customs territory of the United States through evasion” and the CBP had imposed interim measures.

The investigation was initiated upon “an allegation submitted by the Ad Hoc Shrimp Trade Enforcement Committee (AHSTEC) on evasion of anti-dumping duties by MSeafood,” the letter said.

The AHSTEC claimed MSeafood imported Indian-origin frozen shrimp into the US, which was transshipped through Viet Nam, the letter said.

Minh Phu Seafood Corp has responded it had not received any official inquiries from the CBP and the interim measures were based only on evidence provided by AHSTEC without asking for co-operation from Minh Phu Seafood.

The firm’s US lawyer had registered with the Enforce and Protect Act (EAPA) to deliver evidence so the final measures could be made, the company said.

“Minh Phu does not export finished Indian shrimps to the US. The company only buys raw materials for processing,” the firm said, adding some information provided by CBP regarding its production and imports was inaccurate.

The company said it would fully co-operate with US regulators to settle the case.

In 2019, Minh Phu Seafood’s total production was down 9.05 per cent on-year to 59,500 tonnes.

Total exports were 57,700 tonnes, worth US$643 million. The figures were down 14.69 per cent and 14.25 per cent on-year.

In the US market, the company recorded a 19.57 per cent annual drop in its exports, which retreated to $246 million.

Minh Phu Seafood shares (UPCoM: MPC) dropped 1.7 per cent to end Monday at VND22,500 ($0.97) per share. Its shares tumbled 6.2 per cent on Friday after the investigation was reported.