The Secretariat of the Party Central Committee, in an announcement released by the Party Central Committee's Office on March 8, stressing that this is a complex, serious, and sensitive case, drawing special attention from the public.
Mobifone's billion-dollar acquisition of multimedia company AVG is considered "a serious case".
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Any sign of violations, therefore, would be subject to criminal probes.
On September 6, 2016, the Government Inspectorate announced their decision to investigate Mobifone, Vietnam's third largest telecom company.
The investigation of Mobifone's acquisition of AVG was to last for 50 days, however, the process has been dragged out to nearly one and a half years since then. The investigation's final results, to date, have yet to be announced to the public.
It was previously reported that Mobifone purchased 95% of AVG's stakes for VND8.9 trillion (US$400 million), 2.58 times higher than AVG's charter capital (VND3.6 trillion, or 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.
AVG, which entered the pay TV market at the end of 2011, expected the share sale to help solve its financial difficulties. At the end of 2014, it held a 6.4% market share.
AVG was established in 2008 and rolled out its television services in 2011. Its subscribers in 2014 numbered around 450,000, accounting for some 4.5% of Vietnam's 9.9 million subscribers at the time. The company was founded by Pham Nhat Vu, the younger brother of Vietnam's first billionaire Pham Nhat Vuong.
The ongoing investigation is becoming a main hurdle as Mobifone is planning for its initial public offering (IPO) this year, following several delays in the past.
Mobifone was valued at US$3.4 billion by Ho Chi Minh Securities Corporation (HSC) in 2015 as part of its planned IPO in 2016. However, the move failed to materialize in spite of interest from foreign telecom service providers like Singtel (Singapore), Telenor (Norway), Comvik (Sweden) or Telstra (Australia).
As Mobifone's US$3.4 billion valuation is only valid for 18 months, the company will have to be revalued, which is expected to take 6 months.
