HA NOI (VNS) — It is a mistake to co-operate with Korean food and shopping conglomerate Lotte, claims the CEO of confectionery firm Bibica (BBC), Truong Phu Chien.
"The co-operation did not come up to my expectations. In some ways, developments were opposite to the original purpose," he said.
When choosing Lotte as a partner, Bibica wanted the support in terms of management, technology and knowledge on imports and exports.
"After five years, however, Lotte has been always targeted at making us a subsidiary," he said.
Chien said that Lotte's activities in Bibica showed that the Korean investor wanted to exploit the Vietnamese company as a distribution unit.
"When my company invested in producing the Lotte Pie brand, we could not develop diverse products, only Lotte's products," Chien added.
When the agreement on producing Lotte Pie products expires this October, Bibica will no longer co-operate with Lotte.
Domestic businesses did not often state the maximum stake a foreign investor could hold when making contracts, Chien said.
"Less than 25 per cent ownership for a foreign investor is the safety zone. If holding more than 34 per cent, the investor can dominate."
Currently, Lotte holds 38 per cent of Bibica.
In an announcement made on Thursday, deputy director Nguyen Khac Hai of SSI Asset Management – the major shareholder in Bibica – said he did not attend the confectionery firm's annual meeting because of its troubles with Lotte.
Saigon Securities Inc (SSI), the mother company of the fund holding nearly 30 per cent in Bibica, received some information about the poor business of Bibica.
"First, the illegal retirement of some regional sales directors will cause serious impacts to the business in the north," Hai said.
In addition, he claimed Bibica had signed some contracts with Lotte without the board of directors' approval. These deals showed unfavorable terms for Bibica.
SSI chairman Nguyen Duy Hung told the financial information website vietstock.vn that he did not go to Bibica's shareholder meeting "to hear arguments between Bibica and Lotte".
"The conflicts between them have peaked as the management officials don't trust each other," he said.
Because each of the sides would state their own reasons, Hung suggested shareholders with no conflicts of interest should find a common voice before organising another meeting.
Lotte was not available for comment. — VNS