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Another official suspected of land violations at Sabeco as former trade minister, deputy charged
The Saigon Times
Sunday,  Jul 12, 2020,10:16 (GMT+7)

Another official suspected of land violations at Sabeco as former trade minister, deputy charged

The Saigon Times

The piece of land at No.2-4-6 Hai Ba Trung Street, District 1 has been left deserted for years after Vietnam’s largest brewer Sabeco sold its entire stake in Sabeco Pearl Investment JSC – PHOTO: TNO

HCMC – Phan Chi Dung, a former senior official from the Ministry of Industry and Trade (MoIT), has been charged with State asset mismanagement for his alleged role in the handover of a 6,000 square-meter piece of land in downtown HCMC to the private sector.

The Ministry of Public Security said in a statement that the move was part of a probe into irregularities over a project involving Saigon Alcohol Beer and Beverages Corporation (Sabeco), at No.2-4-6 Hai Ba Trung Street, District 1.

Dung, 63, former head of the MoIT’s Light Industry Department; Vu Huy Hoang, 67, who headed the ministry between 2007 and 2016; and his deputy minister Ho Thi Kim Thoa, 60, were charged with breaking regulations on the management and use of State assets which led to losses and wastefulness.

The offence, based on Clause 3, Article 219 of the 2015 Penal Code, is punishable by 10 to 20 years’ imprisonment.

The former minister Hoang is under house arrest, due to his health problems while Dung is held in police custody.

An investigator told the news website Zing.vn that Thoa went to France after her retirement in 2017. During the investigation, she was found to have violated laws, so a prosecution decision against her was made.

The MPS’s investigative police agency is carrying out procedures for judicial assistance with the International Criminal Police Organization, or Interpol to issue an international order so that they would work together to arrest Thoa and bring her home, according to the investigator.

The Light Industry Department is an agency in charge of the beer, alcohol and beverage sector, among others.

Former Minister and former Deputy Minister of Industry and Trade Vu Huy Hoang and Ho Thi Kim Thoa, and Phan Chi Dung, former head of the Light Industry Department are seen in this combined photo – PHOTO: MPS

Local media reported that the plot of land at No.2-4-6 is in a prime location as it borders the streets of Hai Ba Trung, Dong Du, Thi Sach and Cong Truong Me Linh adjacent to the Nguyen Hue Pedestrian Plaza.

The Ministry of Finance gave Vietnam’s largest brewer Sabeco the green light to build its headquarters and a trade, service and office center in line with a plan on the rearrangement and handling of public land and housing.

In February 2018, Sabeco struck deals with three corporate shareholders – Attland Corporation, Ha An Investment, Trade and Service JSC and Me Linh Invest JSC – to set up Sabeco Pearl Investment JSC at charter capital of around VND567 billion.

At that time, the brewer held a 26% stake in Sabeco Pearl. Its establishment was aimed at carrying out the Saigon Me Linh Tower project.

However, it was not until mid-2016 that Sabeco divested its entire stake in Sabeco Pearl as it sold more than 14 million shares worth nearly VND195 billion (US$8 million) to the founding shareholders.

As a result, Sabeco was not involved in the No.2-4-6 Hai Ba Trung piece of land any more.

In 2017, the State Audit of Vietnam (SAV) said Sabeco had committed a slew of violations on the management and use of public capital, especially its divestment from Sabeco Pearl.

The SAV stated that Sabeco had transferred the land at a “ridiculously low price” as each share was sold at VND13,347 (US$0.58).

Sabeco determined the starting unit price of VND13,247 (US$0.57) based on an erroneous valuation of Sabeco Pearl, according to the auditor.

For example, while using the surplus cost method, Sabeco Pearl used a discount rate to convert future cash flows to the value of 13.69%.

However, the discount rate determined by the HCMC Valuation Association and appraisal firms for Sabeco Pearl’s real estate projects was 11% in 2016. Consequently, the value of the Sabeco Pearl had been significantly reduced.

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