Serious violations during MobiFone-AVG acquisition to draw penalties

The acquisition of AVG by MobiFone has caused a loss of millions of dollars to the state

According to the conclusions of the Central Inspection Commission of the Communist Party of Vietnam persented at the 26th meeting, Truong Minh Tuan and Nguyen Bac Son, the current and former ministers of Information and Communications, are responsible for "serious violations" during the acquisition of Audio Visual Global JSC (AVG) by state-run MobiFone, which caused a loss of millions of dollars to the state capital.

The commission brought up the issue of personal culpabilty.

The conclusion has pointed at former Minister Nguyen Bac Son as the one who should take primary responsibility for the deal. He had let his ministry violate the Law on Investment by approving MobiFone’s acquisition of AVG without the prime minister’s approval.

In 2016, MobiFone had made headlines after announcing to set foot in the pay TV market with the acquisition of a 95 per cent stake in AVG.

MIC had approved the deal despite the fact that the price and the project’s investment efficiency had not been fully assessed, the Government Inspectorate said in March. The ministry was irresponsible in its work and approved the acquisition without a legal basis, violating the law and causing huge losses to the state budget.

The Government Inspectorate concluded that the deal has violated investment laws and caused an estimated loss of about VND7 trillion ($307 million) to the state.

The Central Inspection Commission has just found that Truong Minh Tuan, the then-deputy minister and current Minister of MIC, had signed the decision to approve the deal and several other documents with contents that did not adhere to the nation’s laws.

Pham Hong Hai, current deputy minister of MIC, showed a lack of responsibility in managing and inspecting the operations of MobiFone and signing several illegal documents related to the acquisition.

Pham Dinh Trong, director general of MIC’s Department of Enterprise Management, also participated and provided advisory to leaders of MIC to make the deal happen, the commission said.

Le Nam Tra, chairman of MobiFone, has to take full responsibility for the members’ council approving and executing the deal, while Cao Duy Hai, general director of MobiFone, worked with the council on operating the project and signed many documents violating the law.

The commission confirmed that the violations of the six officials are serious, causing huge losses for the state, and potentially affecting the operations and the divestment of state capital in MobiFone, and therefore, they should receive proper punishment.

Earlier, AVG returned all the money that MobiFone had spent on the acquisition in five payments between March 15 and April 26. This includes the amount that MobiFone paid for AVG shareholders to purchase 95 per cent of the shares (over VND8.445 trillion, equivalent to $372 million) and more than VND59.7 billion ($2.63 million) as part of relevant costs and interest.

However, MobiFone has yet to return the shares and is waiting for confirmation from the Government Inspectorate.