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Former chairman of Saigon Co.op detained

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HCMC – Diep Dung, former board chairman of the Saigon Union of Trading Cooperatives (Saigon Co.op), has been prosecuted and detained for abusing power while on duty.

Investigators of the HCMC Police Department today, December 16, issued a decision prosecuting and arresting Dung and raided his house and office, after verifying a crime case following the HCMC Inspectorate’s conclusion about regulatory compliance at Saigon Co.op.

Earlier, the HCMC Inspectorate had pinpointed a number of his violations in raising capital for Saigon Co.op.

Saigon Co.op’s capital is funded by the State and member cooperatives. As of last year, its capital formed from the retained earnings reached nearly VND3.2 trillion. At the beginning of this year, Saigon Co.op decided to raise its charter capital to some VND6.8 trillion.

However, irregularities were discovered regarding the capital contributions by several member cooperatives.

Linh Tay Trade and Services Cooperative reported a loss of nearly VND49 million but contributed over VND950 billion to Saigon Co.op. Similarly, Do Thanh and Thi Nghe trade and services cooperatives reported their respective losses of VND721 million and VND163 million while their capital contributions to Saigon Co.op were nearly VND250 billion and VND245 billion.

The HCMC Inspectorate found that 20 of the 26 member cooperatives made capital contributions but none of them could provide proof of their capital contributions to the inspection team. Meanwhile, Saigon Co-op’s after-tax profit has remained steady over the years, at between VND800 and 1.5 trillion, with the profit margin reaching 26-39%.

The HCMC Inspectorate added that there are many non-members of Saigon-Co.op that have managed to invest capital in the unit. According to the prevailing regulations of the union, capital financed by member cooperatives must not come from bank loans or business rivals.

Saigon Co-op’s board of directors had not fully executed its responsibilities and power in reviewing the amount of capital mobilized by member cooperatives, said the inspection agency.

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