Vinachem’s investments put under inspectors’ scrutiny

The Government Inspectorate’s figures showed that by the end of 2010 more than VND1.030 trillion ($48.07 million) were raised from equitising Vinachem’s member units. However, a number of problems persisted with the use and management of that sum.

Vinachem did not open a specific account at a bank or state treasury office to manage the sum. Instead, it disbursed that chunk of cash in ways not conforming with state regulations. For instance, the group took more than VND404 billion ($19.4 million) from the sum to supplement its chartered capital, without the prime minister’s permission.

Besides, it lent member firms VND193 billion ($9.2 million) with interest rates ranging between 8.04-15 per cent, per year and put VND718 billion ($34.5 million) in banks to enjoy 7.8-14 per cent per year interest rates. This was dubbed as ‘improperly using the sum’ under the spirit of Decision 174/2002/QD-TTg dated December 2, 2002.

The Government Inspectorate also uncovered that in 2007 Vinachem spent VND7.5 billion ($380,000) on procuring shares of Vietnam Industry and Commerce Securities Company (VICS) with a stock value mounting to VND22.29 billion ($1.07 million) by 2010.

“Vinachem was required by the government to divest from VICS. However since selling stock at this point of time is not a wise decision as the stock market is still in a fix, we will divest at an appropriate time,” said Vinachem’s general director Nguyen Dinh Khang.

Noticeably, Vinachem’s DAP Haiphong fertiliser plant with investment exceeding $172 million was found 766 days behind schedule with its EPC package handled by China’s CE-LIA contractor consortium. The Chinese contractors attributed the delay to relevant Vietnamese parties’ faults in site clearance and associated works.

In fact, construction of DAP Haiphong plant kicked-off in July 2003 in Haiphong’s Dinh Vu peninsula.
The EPC contract was inked on October 31, 2005 and the plant became operational in late April 2009. By late November 2011, the plant created jobs for nearly 700 labourers with incomes averaging VND6-7 million ($280-$330) per month.