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Violations at Da Phuoc complex project in Danang announced

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HCMC – The Government Inspectorate on August 14 announced the findings of an investigation into violations of regulations on the management and use of land at the Da Phuoc urban area and golf course complex project, a sea land reclamation project in Danang City.

Accordingly, the municipal government launched the project in 2005.

At the inspection time, the project included two subprojects: Da Phuoc international urban area and Thanh Binh coastal shophouses and villas.

The Da Phuoc international urban area subproject was planned to cover 181 hectares of land. From 2006 to 2015, the project was executed by Daewon Cantavil Co., Ltd. In October 2006, Daewon Co., Ltd transferred 99% of its capital in Daewon Cantavil to Nova Bac Nam 79 JSC.

Meanwhile, the Thanh Binh coastal shophouse and villa subproject was scheduled to be developed by Da Phuoc Housing Development Co., Ltd on 29 hectares of land.

According to the Government Inspectorate, the Danang government assigned the Danang Urban Planning Institute to hand over land to Deawon Cantavil to develop Da Phuoc international urban area without consulting with environmental protection agencies and the authorities of the area where the project would be developed, which went against the law.

In addition, the city did not ask the municipal Department of Planning and Investment and other relevant departments and agencies to issue the investment certificate for the subproject, but assigned the Danang Investment Promotion Agency to receive the investor’s dossiers and appraise the project, which was illegal.

It also broke the Construction Law when approving the 1/500 detained planning and adjustments for the Da Phuoc international urban area subproject and did not ask for opinions of the relevant agencies and individuals.

The planning was adjusted many times, changing the land use purpose and creating impacts on the environment, but the Danang government did not ask Daewon Cantavil to make the supplementary environment impact assessment report, which went against the 2005 and 2014 Environmental Protection Laws.

Moreover, Phan Van Anh Vu and Le Van Sau are the same person, so a contract between Bac Nam 79 Construction JSC, owned by Vu, and Sau was invalid, in line with the 2005 Civil Law.

The city violated the Investment Law when granting investment certificates for the two subprojects without consulting with the relevant ministries and agencies.

Moreover, the investors of both subprojects were changed but the information in the investment certificates was not adjusted at the inspection time, violating Item 1 of Article 33 in the Government’s Decree 118/2015/ND-CP dated November 12, 2015.

The inspectorate also concluded that the investor did not make the environment impact assessment report for the Thanh Binh coastal shophouse and villa subproject. Additionally, the investor was not granted the construction license.

Notably, the average price of land in the site of the project was over VND5.1 million per square meter, according to the land price in 2011 set by the Danang government. This means that the total land use fee must be nearly VND1.5 trillion, but Bac Nam 79 Construction JSC paid only VND87 billion.

Bac Nam 79 Construction JSC also transferred all of its charter capital at Da Phuoc Housing Development Co., Ltd to Vo Ngoc Chau, a board member and deputy general director of the company. After the transfer, Chau became chairman of the company. Under the law, Bac Nam 79 Construction JSC must pay the corporate income tax of some VND573.4 billion but it declared the tax at zero dong, showing signs of violating tax regulations.

The Government Inspectorate has transferred documents on violations at the project to the Ministry of Public Security for further investigation in line with the law.

The inspectorate has also proposed the prime minister ask the Danang government to address these violations, amend unreasonable decisions and cancel those issued by unauthorized agencies, and ask investors to comply with regulations on investment, land, environmental protection, finance and other relevant regulations.

The municipal government was also told to impose disciplinary measures against organizations and individuals committing these violations.

The city must complete procedures to take back the project and create conditions for other investors to use of the land effectively, contributing to the city’s socioeconomic development and preventing complaints or lawsuits afterwards.

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