Five more officials prosecuted in Mobifone’s AVG purchase case

Update: August, 27/2019 - 15:23


Illustrative photo. VNA/VNS Photo

HÀ NỘI — The Investigation Police Agency under the Ministry of Public Security has begun legal proceedings against another five officials of the State-owned telecommunications giant Mobifone for their role in a major corruption case.

They include Phan Thị Hoa Mai, a member of the Board of Members of Mobifone, and four deputy general directors – Hồ Tuấn, Nguyễn Đăng Nguyên, Nguyễn Bảo Long and Nguyễn Mạnh Hùng.

They face the charge of “breaching regulations on the management and use of public investment capital, causing serious consequences” under Article 220 of the 2015 Penal Code, the ministry announced on Monday.

Earlier, the agency started legal proceedings against nine others involved in the case for the same charge.

Last July, the agency launched criminal proceedings against violations relating to Mobifone’s purchase of 95 per cent of the shares of Audio Visual Global JSC (AVG).

In a statement released on July 10, 2018, the agency announced it had issued Decision 26/C46-P13 initiating a criminal case on suspected violations of regulations on the management and use of public capital in Mobifone, which is under the management of the Ministry of Information and Communications (MIC), and related agencies.

According to the Government Inspectorate (GI), Mobifone broke regulations in the acquisition, especially in assessing AVG’s financial situation, leading to State budget losses of VNĐ7 trillion (US$302 million) and affecting Mobifone’s finances, resulting in difficulties during the company's equitisation process.

AVG faced difficulties from its establishment to the time of business valuation in March 2015 with accumulated losses of more than VNĐ1.6 trillion, accounting for 45 per cent of its charter capital.

However, Mobifone was dishonest in reporting AVG’s financial situation to the MIC during the acquisition.

According to the GI, the assessment violated regulations for investment and the management and use of State capital.

The GI stated that responsibility for the wrongdoings fell on the Board of Members, the Board of Directors, the chief accountant and other departments of Mobifone.

The GI also said the MIC, as the representative of the State ownership and the State agency in charge of management of information and communications, showed a lack of responsibility in assessing the acquisition. Its approval of the acquisition had caused serious losses of State capital, so it must be annulled, the GI said.

In addition, the acquisition was not eligible to be classified as a State secret but the ministry asked the Ministry of Public Security to include it in the list of classified information, which violated laws on the publishing of information of State-owned one-member limited liability companies.

MIC officials in charge of the case must bear responsibility for the violations, the GI said.

A day before the GI’s announcement, Mobifone and AVG decided to cancel the transfer of 344.66 million shares and refund each other the amount received under the agreement.

AVG shareholders will refund the entire amount paid by Mobifone, while Mobifone will return to AVG the number of shares and assets transferred. The two sides will attempt to limit each other's losses.

In addition to the amount paid to AVG, Mobifone said it had to pay some related expenses, such as consultants’ fees. AVG has agreed to share these costs. — VNS

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