Wednesday, 26 Jun 2019
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ECONOMY

Sabeco loses US$670 million in market valuation over tax dispute

Updated at Tuesday, 08 Jan 2019, 06:38
The Hanoitimes - The main reason behind a slump in Sabeco’s share price was due to the enforcement of tax administrative decision by taking a total of VND3.1 trillion (US$135.73 million) from the beer company’s bank account.
A sharp decrease of nearly 10% in share price has led to Vietnam’s largest domestic brewer Saigon Beer Alcohol Beverage (Sabeco) sustaining a loss of VND15.6 trillion (US$670 million) in market valuation from 641 million shares being listed, following its recent dispute with tax authority. 
 
Illustrative photo.
Illustrative photo.
Sabeco’s share value fell in a third consecutive trading session by VND24,300 (US$1.05) on January 4 to reach VND243,200 (US$10.49) apiece. 

Notably, the brewer’s shares were down nearly 7% of its value or VND18,700 (US$0.81) per share in the first trading session in 2019, which later decreased by 1.33% and 0.94% in the subsequent two days. 

Experts said that the main reason behind a slump in Sabeco’s share price was due to the enforcement of the decision of the Taxation Department of Ho Chi Minh City by taking a total of VND3.1 trillion (US$135.73 million) from the beer company’s bank account, according to VnExpress. 

The tax authority stated the move is aimed to collect special consumption tax arrears in the 2007 – 2015 period and penalties for breach of tax administration law. 

In response, Sabeco’s General Director Neo Gim Siong Bennett, said in a statement that the company did not make false tax declaration, calculation and payment of special consumption tax. 

Bennett added that the enforcement action by the tax authority was a violation of Vietnam laws, as it was taken ”without a valid administrative decision handling and administrative violation” and “contradicts with the very written guidance issued by the Ministry of Finance, General Department of Taxation and Tax Department of Ho Chi Minh City.”

Sabeco’s legitimate interests are being threatened due to the inconsistent views among state authorities, he stressed.

On January 2, 2019, Sabeco said it had received official letter of the Government Office, under which Prime Minister Nguyen Xuan Phuc requested the suspension of the enforcement against the company, pending review by related ministries and state agencies. 

Ho Chi Minh Securities Company (HSC) forecast Sabeco’s net revenue and after-tax profit in 2019 to reach VND37.96 trillion (US$1.64 billion) and VND4.93 trillion (US$213.01 million), respectively. This would result in a price/earnings ratio (P/E) of 30, or net earnings of VND7,282 (US$0.31) per share.
Ngoc Thuy
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