Business
Businesspeople subvert gift-giving for ulterior gain
  • | Dat Viet, dtinews.vn | May 14, 2012 06:03 AM

Rich businessmen are giving their partners gifts including shares and land often to influence company ownerships or valuations, yet there are still some socially conscious people favouring donations to charity.

 

 A token ‘gift’

Nguyen Thi Nhu Loan, Chairwoman of Quoc Cuong Gia Lai Joint Stock Company (QCG) notified the HCMC Securities Commission that she would give 150,000 company shares as a gift to someone this summer. If the transfer goes through, Loan will retain 60.58 million shares of the company.

This is the second times in a short time period that the businesswoman has used QCG shares as gift. At the end of 2011, Loan intended to gift 201,005 shares to another partner but they refused so she only gave them 81,850 shares. With QCG share's price on May 7 stood at VND12,500 (USD0.6) per share, Loans generous gift would be worth more than VND1.87 billion (USD70,000).

Back in March, 2009, the HCMC Securities Commission announced that Dang Quang Hanh, Vice General Director of Tan Tao Industry Corporation had gifted 534,000 shares worth VND10,371 billion (USD) at that time to Tan Tao University. He said the money would be spent on scholarships for students.

Prior to that, Hanh offered 2.8 million shares to the ITA Charity Fund and Dong Nam A College in July 2008. After the gift, the Hanh's shares declined from around 4.9 million to 2.2 million. By which point Hanh had given away VND257.6 billion (USD12 million) in shares.

Another gift that surprised the public and stock investors happened in March 2007, the vice chairman of FPT transferred over 1.85 million shares from a total of 3.7 million to his wife following their divorce. He then gave another 900,000 to his daughter.

In July, 2007, Luong Cao Tung, a board member of Ben Tre Import Export JSC also sent 250,000 shares worth over VND25 billion (USD1.2 million) to his wife's sister.

Though those direct transfers are considered exceptions that do not require agreement from a third party, transfers can only be allowed if they do not create a profit. The State Securities Commission said many investors have used this way to acquire listed companies or manipulate market price and the rules are still unclear when it came to regarding shares as a gift or an asset.

Last March, the Ministry of Industry and Trade denied an individual request to import a Bentley Continental Spur worth VND10 billion (USD479,000), as a non-commercial gift.

Some custom officers have said this may be a way to import more cars since Circular 20 on tightening the control of car imports came into effect.

Alternatives to transferring money from overseas into Vietnam include the giving of valuable presents which can then be sold.

HCMC Customs previously turned down an individual request to import 7,500 pairs of sports shoes from China on the pretext that they were gifts.

In April, the public also raised concerns when the Pacific Petro Construction & Installation Corporation gave the Ministry of Transport a Land Cruiser VX worth VND2.6 billion (USD125,000). This corporation later won a bid for a Ministry of Transport project.

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