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Sadeco board member detained over alleged violations at IPC

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HCMC – Nguyen Huu Thanh, a board member of the South Saigon Development Corporation (Sadeco), has been arrested by the HCMC Police Department for his alleged involvement in violations discovered at the Tan Thuan Industrial Promotion Co. Ltd. (IPC).

The municipal police on Thursday, December 17, issued decisions to detain Thanh and search his house for evidence to serve an investigation into violations on the management and use of State assets that caused losses for the State, reported Thanh Nien Online.

According to the investigators, Thanh was board chairman of property firm Eximland, which owns the shares of Sadeco. In 2016, Eximland sold the Sadeco shares to Nguyen Kim Company, at a price of VND57,000 per share.

However, until 2017 when Thanh had joined the board of directors of Sadeco, along with the board, he passed a plan to sell nine million Sadeco shares to strategic stakeholder Nguyen Kim at a price of VND40,000 per share, which was lower than the share price in the previous deal and the market price, causing losses for Sadeco and the State.

Sadeco is a subsidiary of IPC, a wholly State-owned business with a total charter capital of some VND2.9 trillion.

Of the Sadeco charter capital at VND170 billion, the capital from State agencies and businesses accounted for 62.8%, with IPC owning a 44% stake and the Office of the HCMC Party Committee owning 2.6%.

Following a proposal from IPC’s capital management team, the Office managed to seek an approval from Tat Thanh Cang, who was at the time standing deputy secretary of the municipal Party Committee, over a plan to issue shares to the strategic stakeholder to raise Sadeco’s charter capital in mid-2017.

However, the investigators discovered that during the process to choose Nguyen Kim as a strategic stakeholder, Sadeco and IPC leaders had failed to make appropriate and transparent reports, to assess the capacity of the stakeholder, to offer a share price in line with Sadeco’s asset value and to ensure the interests of Sadeco and the stakeholders.

Accordingly, the issuance of nine million Sadeco shares to Nguyen Kim at a low price without undergoing any assessment process caused a loss worth over VND300 billion for Sadeco.

Related to this case, the HCMC police prosecuted 17 people, with most of them holding key positions at IPC and Sadeco and some being former State employees of the HCMC Party Committee’s Office.

On Wednesday, December 16, the police detained Tat Thanh Cang, former permanent deputy secretary of the municipal Party Committee, to serve the investigation.

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