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Charges brought over MobiFone's AVG purchase
  • | VET | July 17, 2018 04:02 PM

The Ministry of Public Security’s Investigation Police Agency (C46) has launched criminal proceedings relating to the State-owned telecommunications giant MobiFone’s purchase of 95 per cent of the Audio Visual Global JSC (AVG), according to a report from the Vietnam News Agency (VNA).


Former Mobifone Chairman Le Nam Tra (Photo from news.zing.vn)



The State-owned news agency quoted a statement from C46 on July 10 announcing that it had initiated a criminal case on suspected violations of regulations on the management and use of public capital that led to serious consequences at MobiFone, which is under the management of the Ministry of Information and Communications (MIC) and related agencies.


C46 also began legal proceedings against and ordered the arrest of Le Nam Tra, former Chairman of MobiFone’s Member Council, who is currently an official at the MIC, and Pham Dinh Trong, Director of the MIC’s Department of Enterprise Management.

Both Tra and Trong face up to 20 years in prison.

On the same day, the Supreme People’s Procuracy approved C46’s decisions and orders.

Earlier, on June 27 and 28, the Party Central Committee’s Inspection Commission held a meeting on disciplinary measures against Tra and Trong by dispelling them from the Party.

On July 10, the Party Central Committee’s Secretariat issued a formal warning to the Party Committee of the MIC for the 2011-2016 tenure.

According to the Government Inspectorate (GI), MobiFone was irresponsible and broke regulations in the acquisition, especially in assessing AVG’s financial situation, leading to State budget losses of VND7 trillion ($303.7 million) and affecting MobiFone’s financial position, resulting in difficulties equitizing the company.

The AVG faced difficulties since its establishment to the time of its business valuation in March 2015, with accumulated losses of more than VND1.6 trillion ($69.4 million); 45 per cent of its charter capital.

MobiFone was dishonest in reporting AVG’s financial situation to the MIC during the acquisition.

According to the GI, the assessment violated regulations for investing, managing and using State capital.

The GI stated that the responsibility for the wrongdoings was with the Board of Members, the Board of Directors, the chief accountant, and other departments of MobiFone.

The GI also said that the MIC, as the representative of State ownership and the State agency in charge of the management of information and communications, showed a lack of responsibility in assessing the acquisition. Its approval had violated legal rules, causing serious losses of State capital, the GI said.

In addition, the acquisition was not eligible for being classified as a State secret but the ministry asked the Ministry of Public Security to include it on the list of classified information, which violated laws on issuing regulations 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 announcement, MobiFone and AVG decided to cancel the transfer of 344.66 million shares and refund 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.

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 this expense with MobiFone.

The VNA also reported that the Politburo issued a warning as a disciplinary measure on July 12 against Truong Minh Tuan, member of the Party Central Committee, Secretary of the Party Committee of the Ministry of Information and Communications (MIC), and Minister of Information and Communications.

Tuan, who is also a member of the Party Committee of the Central Agencies Bloc for 2015-2020, was also relieved from his post as Secretary of the Party Committee of MIC for the 2016-2021 term.

The decision was made during a meeting of the Politburo in Hanoi, chaired by General Secretary of the Communist Party of Vietnam’s (CPV) Central Committee Nguyen Phu Trong.

The Politburo also asked the government’s Party Committee to instruct the imposition of administrative discipline against Tuan, in line with Party discipline.

According to the Politburo, Tuan must bear responsibility for violations and wrongdoings committed by the ministry’s Party Committee for the 2011-2016 term when he was serving as a member of the Party Committee of the MIC and Deputy Minister.

He violated the principle of democratic centralism and working regulations, showed a lack of responsibility and inadequate leadership when tasked with directing the implementation of the project on the purchase of 95 per cent of AVG by MobiFone. He also signed Decision No. 236/QD-BTTTT dated December 21, 2015 approving the project, as well as a number of related documents that went against regulations, including documents beyond his assigned duties.

In his capacity as Secretary of the MIC’s Party Committee and Minister from April 2016, Tuan is held responsible for violations and wrongdoings committed by the committee for the 2016-2021 tenure.

During the meeting, the Politburo also concluded that Nguyen Bac Son, former Party Central Committee member, former Secretary of the Party Committee of the MIC, and former Minister of Information and Communications, holds the main responsibility for violations and wrongdoings committed by the Party Committee for 2011-2016.

He violated the principle of democratic centralism and working regulations and showed signs of imposition and a lack of democracy in leadership and steering work. He directly decided and instructed on many of the project’s contents that were against legal regulations. He signed project-related documents that were submitted to the Prime Minister for approval and assigned his subordinates to sign a number of project-related documents that were against regulations and were not included in their duties. He made insufficient direction and inspection during project implementation.

The Politburo said the violations by Son and Tuan are very serious and it therefore asked the Party Central Committee to consider serious discipline against Son.

According to the Politburo, the MIC’s Party Committee committed serious violations in the case, causing huge losses to the State budget and seriously affecting the operation and equitization of MobiFone, harming the prestige of Party organizations and the ministry, and stirring public anxiety. It also allowed some of the ministry’s leaders to seriously violate working regulations and fail to complete their assigned tasks.

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