Partners need to row in same direction

January 10, 2011 | 14:24
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“We have undertaken many different efforts and made suggestions to resolve this case”
Tjeert Kwant

The $100 million Promenada shopping mall in southern Binh Duong province has hit delays and its developers have been warned having their licence withdrawn (see VIR Issue 1003).

VIR’s Song Ngoc talks with Tjeert Kwant, president and CEO of ECC IP Holdings - the major shareholder of the venture, about the solutions to salvage the project.

We understand, this is the first investment project of ECC into Binh Duong in particular and  Vietnam in general, how have the authorities of Binh Duong supported you in this project?

The support of the authorities for the Promenada @ Canary has been excellent and our relationship with the provincial leaders has been very positive and open.

They have shown interest in our organisation by visiting our office and flagship shopping mall in Poland in 2009 and they have also participated in a seminar last year organised by ECC and PriceWaterhouseCoopers in Amsterdam to promote Vietnam in general and Binh Duong in particular.

I have been invited several times for TV interviews and I have always promoted Binh Duong as the ideal gateway into Vietnam for foreign investors. This has motivated several Dutch companies to establish a company and factory there.

Also in the difficult period since mid 2010 the authorities have played a significant role in stimulating Singapore’s GuocoLand [the minor shareholder in Promenada project] and ECC to resolve  problems and to move on with the project. Unfortunately GuocoLand has not been willing to continue the project with ECC.

Do you have confidence that both ECC and GuocoLand  could soon figure out a reasonable solution for the both sides, with the support of the local authorities?

We have undertaken many different efforts and made suggestions to resolve this case but GuocoLand has refused and did not suggest any serious solution.

The argument it used to terminate the joint venture agreements with us was that weird and its behavior so suspicious that I am convinced it does not have any intention to resolve this matter at all. At this moment we are awaiting the decision of the authorities in Binh Duong on the measures they will take, this will determine our further actions.

We sincerely regret that we have to protect our interest this way, we would rather focus on positive things like a successful development of this beautiful shopping and entertainment complex which would contribute a new chapter to the Vietnamese retail history and become a landmark in Binh Duong.

In June, 2010 GuocoLand  unilaterally decided to terminate the joint venture agreements. In case where you and GuocoLand may fail to settle down the dispute with possibility that the investment certificate would be revoked as a result of one-year delay, will the dispute be brought to the court so that ECC could seek compensation for any loss?

We will not accept to be damaged by GuocoLand and we will protect our interest and of our financial partners. If this requires us to go to court we will seriously consider that option.

Is it true that Binh Duong authorities had already introduced ECC another piece of land to carry out your own project, as a condition for you to get out of the venture with GuocoLand?

The authorities have been very supportive but never tried to force us nor did they set any condition. We are not that interested in another piece of land if GuocoLand is allowed to continue with the shopping mall on its land.

GuocoLand has been searching for an expert like ECC to become its joint venture partner and we have created the project like it is today. We have made a new attractive design and we have attracted over 120 serious retailers eager to join us. In case of another piece of land, we should compete with the result of our own hard work and intellectual property?

Will the difficulties in the first project which ECC has been implementing in Vietnam affect your long-term investment in the country?

 Not at all. This is not a Vietnamese problem but a Singaporean one, that’s what is so sour. Until today we have not experienced anything like this with Vietnamese parties.

I am not sure what has caused the behaviour of GuocoLand whether it’s  change in policy with regards to the Vietnamese markets or it’s just financially driven, honestly we never expected this from a respected company listed at the Singapore Stock Exchange.

Nevertheless the end-result is that the project has been on hold for too long and until now there is no winner, hopefully we all can be winners at the end.

vir.com.vn

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