State firm loses VND174 billion in securities investment

Satra poured capital into various areas, including securities, banking and investment funds.

By the end of the first quarter of this year, up to VND546.4 billion ($26.14 million) of the corporation’s capital still remained in eight firms in the fields of securities, insurance and banking. Satra has invested up to VND490 billion ($23.4 million) in six banks which is contrary to a Government policy issued in 2009 requiring state-owned enterprises to restrict their investments to a single company in the fields of securities, banking and insurance.

Satra has only maintained its original investment of VND177 billion ($8.46 million) in four companies; It suffered losses of VND174 billion due to the sharp drop in share value in the remaining four companies due to declining share valuations.

In 2008, it inked a contract with the Thanh Viet Fund Management Co. to buy 481,095 Vietcombank at VND103,000 ($4.9) each on the company’s behalf.

Although it paid the fund VND49.5 billion ($2.36 million), it only received 266,095 shares worth VND27.4 billion ($1.31 million). Despite the fund failing to buy the full amount of shares specified, Satra did not apparently notice the discrepancy until later.

Besides losing the remaining VND22.1 billion ($1.05 million), Satra also lost heavily on the investment since Vietcombank shares currently trades at a VND23,000 ($1.1).

Satra has filed a law suit against Thanh Viet Co.

Last year, the company also lost VND89 billion ($4.25 million) in a dispute over a wheat trading contract with Thai Nguyen 1 Co. Ltd.

Satra received VND11.3 billion ($540,669) in interest free loans over a ten month period to sell 1,700 tonnes of white rice per month at price of VND8,500 per kilo in 66 outlets nationwide.

However, from October 2010 to March 2011, Satra only bought a total 900 tonnes of rice and sold just 604 tonnes in total. Among this, 30 tonnes was sold to the Vietnam Fashion Company and 100 tonnes to Saigon Co.op.

In 2008 the city people’s committee and the Ministry of Finance approved Satra’s bid to issue corporate bonds worth VND1 trillion ($47.8 million) to raise funds for some major projects.

But the corporation deposited a proportion of this money in banks.