Sunday, 26 May 2019

Vietnam's sitting Information minister faces disciplinary warning

Updated at Friday, 13 Jul 2018, 09:50
The Hanoitimes - Sitting and former ministers of Information and Communications are held responsible for Mobifone`s controversial acquisition of AVG, as the Communist Party steps up its anti-corruption drive.
The Politburo - the highest body of the Communist Party of Vietnam - on July 12 issued disciplinary warning against Truong Minh Tuan, minister of information and communication, effectively relieving him from his post as Secretary of the Party Committee of the ministry for the 2016 - 2021 term, the government said on its portal. 
Illustration photo.
Illustration photo.
As per the Politburo's decision, Tuan is responsible for violations and wrongdoings committed by the Ministry of Information and Communications (MIC)'s Party Committee for the 2011 - 2016 term, when he was serving as a member of the Party Committee and MIC's deputy minister. 

The Politburo requested the Government's Party Committee to instruct the implementation of administrative disciplines against Tuan in line with Party disciplines. 

Nguyen Bac Son, former MIC Minister and Secretary of the ministry's Party Committee also faces disciplinary for his role in violations and wrongdoings committed by the Party Committee in the 2011 - 2016 period.

Both Son and Tuan are held responsible for Mobifone's controversial acquisition of 95% stake in TV pay service provider Audio Visual Global (AVG) in a deal worth VND8.9 trillion (US$392 million) in December 2015. 

The Politburo stated the deal "caused huge losses to the state budget and negative impacts on the operation and equitization process of Mobifone, affecting the credibility of the MIC's Party Committee and raising concern among the public."

On July 10, former Mobifone Chairman Le Nam Tra and Pham Dinh Trong, head of the Department of Enterprise Management (MIC) were arrested for their respective roles in the deal, with charges of "violating regulations on the management and use of public capital, causing serious consequences."

Both Tra and Trong had already been expelled from the Communisty Party last month for their violations. 

Controversial deal

On March 14, the government inspectorate (GI) released its conclusion stating Mobifone was irresponsible and violated a series of regulations during the acquisition of AVG. Problems were uncovered especially in the assessment of AVG's financial situation, leading to a potential loss of VND7 trillion (US$307 million) to the state budget. 

Following the results, the GI recommended the Ministry of Public Security  take over the investigation and prosecute violators in accordance with the law. 

In a surprise move, Mobifone and AVG had previously agreed to cancel the acquisition deal on March 12, two days before the GI announced its inspection results. 

Under the agreement, AVG would refund the entire contracted amount of VND8.9 trillion (US$392 million) to Mobifone including interest. 

Mobifone, in turn, will return the shares purchased along with AVG's assets included in the original deal. 

The deal caused great controversy as its value was 2.58 times higher than AVG's charter capital of VND3.6 trillion (US$158 million) at the time of completing the transaction on January 2, 2016.

The investment in AVG was equivalent to 55% of Mobifone's charter capital (VND16.2 trillion or US$711 million) and 40% of its total assets (VND23.2 trillion or US$1.02 billion) as of June 30, 2016.
Nguyen Tung
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