HCM CITY — The Ministry of Agriculture and Rural Development has asked the Việt Nam Southern Food Corporation (Vinafood 2) to review and punish individuals or groups associated with the corporation’s “mistakes” that have caused losses to the State budget. 

The ministry has demanded that the State-run corporation, which has 14 subsidiaries, report the results of its findings and penalties to the ministry before August 15. The report will then be submitted to the Prime Minister.

Hà Công Tuấn, deputy minister of Agriculture and Rural Development, recently approved the inspection results of Vinafood 2’s operations.

In addition to the corporation’s wrongdoings related to the sale of property and site clearance compensation, Vinafood 2 also mismanaged rice exports.

According to the inspection, in 2014 Vinafood 2 sold land assets and transferred the rights to use three land lots in contravention of regulations, at a value of VNĐ114.7 billion (US$5 million).

The inspection results showed that Vinafood 2 did not report the case to the ministries of Agriculture and Rural Development and Finance and the provincial People’s Committees, which was against the PM’s decision on rearranging and handling houses and land owned by the State.

As for high-end hotels, office buildings and commercial centres for lease at 34, 36 and 42 Chu Mạnh Trinh Street and 33 Nguyễn Du Street in Bến Nghé Ward in HCM City’s District 1, the inspection also pointed out that Vinafood 2 issued a resolution dated October 22, 2015 to pay for site clearance compensation to 34 households in contravention of regulations, causing losses of VNĐ54 billion ($2.37 million) to the State.

The chairman of Vinafood 2 was mainly responsible for the breach in these cases, the inspection found.

In addition, according to the ministry’s conclusions, Vinafood 2 also made a series of mistakes in the implementation of rice export contracts, causing losses to the State.

Specifically, Vinafood 2 has not fully fulfilled the responsibilities of a key trader. For example, it did not develop bidding plans or negotiate effectively on contracts to export rice.

It also did not develop any plan of action immediately after signing the contract, and did not have any assessment of the price of exported rice under the contract.

In addition, in 2014 Vinafood 2 suffered a combined loss (before tax) of VNĐ873.3 billion ($38.4 million), of which 11 out of 14 affiliates had business losses.

In 2015, Vinafood 2 had pre-tax profit of VNĐ155 billion ($6.81 million), but that was mainly from the sale of assets worth VNĐ121 billion ($5.32 million).

In the first quarter of 2016, while the parent company’s pre-tax profit was VNĐ51 billion ($2.24 million), its affiliates lost VNĐ46 billion ($2.02 million).

According to the ministry, the main responsibility should be held by the council members, general director of Vinafood 2 and the chairman of the Việt Nam Food Association. — VNS