$650 million of State-owned coal and mining corp not properly handled

Update: January, 06/2018 - 10:00
A coal extraction site of Vinacomin’s Cọc Sáu Coal JSC, located in the northern province of Quảng Ninh. — VNA/VNS Photo Trọng Đạt
Viet Nam News

HÀ NỘI — Potential wrongdoings involving VNĐ15 trillion (US$658.5 million) and 6.7 million sq.m of real estate were found with the State-owned coal and mining giant, Vinacomin.

Other problems in financial management, investment and land management were also disclosed in a recently released report by the Government Inspectorate (GI) regarding law and policy compliance of Vinacomin (Việt Nam National Coal – Mineral Industries Holding Corporation Limited) and its subsidiaries in the 2010-2015 June period.

The GI has asked the Ministry of Public Security to review and investigate these findings.

According to the report, some $4.4 million of capital that Vinacomin poured into the Cambodia-based Southern Mining Co Ltd might be for naught as the corporate’s management board failed to follow legal regulations on investment and co-operation contracts.

Doãn Văn Quang, Deputy Director of the corporation, signed the memorandum to buy shares from the Cambodian company and transferred the said amount of money to a Cambodian account, while no surveys into the return on investment were done.

Similarly, questions have also been raised on Vinacomin’s disbursement of VNĐ112 billion (out of the pledged VNĐ587 billion) into the Cổ Định Chromite project in Thanh Hoá Province, which has not been functional since 2013.

Concerning the management of capital and assets, the inspectorate’s report shed light on several decisions that lack legal and practical basis, such as providing guarantees for loans exceeding the bank’s legal lending limit, which ultimately led to “sizeable losses in certain investments.”

For example, Vinacomin assumed the role of guarantee beyond its authority for loans made by Thái Nguyên Non-ferrous Metal JSC from Thailand’s Eximbank, causing the company to now handle a $13.7 million debt (including the original debt and interest).

Vinacomin’s argument

Đặng Thị Tuyết, head of Vinacomin’s legal department, told Vietnam News Agency that the VNĐ15 trillion figure, as stated in the GI’s report, “is recommended to be properly handled”, and that the report didn’t arrive at the conclusion that there were definitely wrongdoings involving this amount of money.

Tuyết said that the Deputy Prime Minister has assigned as much as VNĐ8.3 trillion, or more than half of the amount found to be problematic, including the difference in exchange rate not yet manifested in the current power price, to be handled by the Ministry of Finance.

Vinacomin also contested the inspectorate’s request that VNĐ1.872 trillion ($82.555 million), much of the figure – VNĐ 1.6 trillion - was natural resources tax on coal, must be collected from Vinacomin to the State budget. The coal giant said the GI’s arrears request was unreasonable, citing a misidentification of the taxpayer and wrong ad valorem tax calculation.

“Vinacomin has declared and paid tax in accordance with the tax law on natural resources, as well as the guiding circulars and decrees,” Tuyết said, adding that the finance ministry concluded that Vinacomin’s tax calculation was proper.

The remaining amount of tax to be paid, VNĐ272 billion, will be addressed when the GI’s arrears decision is officially made, the corporation said.

Regarding possible violations of law in the company’s foreign investment and debt, Vinacomin said that some of the failed investments were due to “risks”, others were done under the Government’s policy, while still others have been handled by competent legal authorities.

Vinacomin also said that its arguments regarding its disagreements with the Government’s watchdog agency would be officially submitted to the authorities concerned. — VNS