Nghi Son refinery site clearance swindler taken to court

Despite not being the contractor, Gia Loc JSC has deliberately signed cooperation contracts with partners to cheat them out of their money

The Nghi Son Refinery and Petrochemical complex (NSRP) based in the north-central province of Thanh Hoa is one of largest foreign direct investment projects in the country, with the investment capital surpassing $9 billion.

The Nghi Son plant kicked off construction in October 2013 and was initially slated to start operations in July 2017.

In a talk with local press this March, Nguyen Van Thi, director of Nghi Son Economic Zone and Thanh Hoa Industrial Zones Management Authority, said that the plant would begin commercial operation from October this year.

The facility will refine crude oil to make liquefied petroleum gas, petrol, diesel, kerosene, and jet fuel among other products, mainly used for domestic consumption.

Japan's Idemitsu Kosan and Kuwait Petroleum International each own 35.1 per cent of the facility, while PetroVietnam has 25.1 per cent, and Mitsui Chemicals 4.7 per cent.

The Project Management Unit has signed contracts on phases I and II of the site clearance with PetroVietnam Construction Corporation (PVC).

In 2009, PVC’s Hanoi branch signed a sub-contract with Gia Loc Technical Infrastructure Construction JSC on equipment leasing to serve the construction. Nguyen Gia Tu acted as the company chairman cum general director.

The indictment says that although Gia Loc JSC did not take on the function of site clearance at the NSRP project, the company’s deputy director Thieu Thi Ban met Do Danh Khanh, director of Thinh An Import Export JSC, to propose cooperation in site clearance at the project.

In September 2009, the two parties signed a cooperation contract on joint implementation and committed to officially sign the tender contract in November 2009.

As Thinh An JSC doesn't have the site clearance function and wants to receive 2 per cent commission from the contract, the company has signed a cooperation contract with Toan Duc Construction and Investment JSC on site clearance with an estimated contract value of VND80 billion (now $3.6 million).

Toan Duc JSC had to pay Thinh An JSC a guarantee of VND1 billion ($45,400) for contract implementation.

In fact, as Gia Loc was not the project contractor, these cooperative contracts could not be realised.

For the civil law part, Toan Duc JSC demanded Thinh An JSC to pay back its guarantee of VND1 billion ($45,400).

On July 24, 2017, after a one-day trial, the Hanoi People’s Court returned the file and ordered additional investigation due to contradictions in the statements and the absence of people with related benefits and obligations.

Gia Loc JSC was founded in 2003 with VND120 billion ($5.45 billion) of chartered capital. It consists of four founding members. In 2004, the company’s chairman and general director Nguyen Gia Tu signed a decision authorising Thieu Thi Ban to use the company’s seal to sign contracts.

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