Vietnam reaffirms inflation control plan

Vietnam will continue to tighten control over consumer prices through the end of the year as the country aims to keep inflation at 8 percent.

At a press conference held on Thursday, Minister Nguyen Xuan Phuc said it will be necessary to keep an eye on milk and medicine prices in particular.

Phuc said the government believes it can keep inflation under its target maximum, but that does not mean there is no need to maintain vigilance.

Prime Minister Nguyen Tan Dung has ordered drastic measures to be taken to keep prices stable and ensure enough supplies of consumer goods, Phuc said.

Consumer prices in Vietnam climbed 8.92 percent in September compared to a year earlier, according to figures released last week by the General Statistics Office in Hanoi.

Meanwhile, the Asian Development Bank on Tuesday forecast that Vietnam’s inflation this year will reach 8.5 percent.

Vinashin’s restructuring

Talking to the press on Thursday, Phuc said state-owned shipbuilder Vinashin has raised US$75 million by selling five ships. The group planned to sell another 35 ships for a total of around $160 million by year's end.

He said the 70,000 jobs at Vinashin have been secured. He also said new blood will be brought into the company, including a new chairman.

Vietnamese police have arrested five former Vinashin officials amid a financial investigation in to the company, which teetered on the verge of bankruptcy this summer. Pham Thanh Binh, the company’s former chairman and chief executive officer, was arrested in August.

Deputy Transport Minister Nguyen Hong Truong announced that the government has lent $3 million from its bond proceeds to Vinashin so that the company could repay the remaining debt owed to France’s Natixis Bank.

The loan did not come from the $1 billion 10-year bond issued in January as reported by local media, he said.

Truong also said many Japanese and Taiwanese investors have expressed interest in buying Vinashin’s factories, but so far no official purchase offers have been made.

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Another Vinashin official arrested

Another former official from the state-owned Vietnam Shipbuilding Industry Group, often known as Vinashin, was arrested Saturday amid an investigation into financial activities at the company.

To Nghiem, chairman of Cai Lan Shipbuilding Industry Company, a Vinashin subsidiary, was detained on charges of “deliberately acting against the state’s regulations on economic management, causing serious consequences.”

Nghiem, 51, was suspected of “appropriating state properties worth tens of billion of dong” when using second hand equipment for a power plant project.

Since it began operations in April 2007, the Diesel Cai Lan Power Plant has faced technical problems and shutdowns, leading to losses of more than VND62 billion.

Vietnamese police have already arrested five former Vinashin officials. Pham Thanh Binh, the company’s former chairman and chief executive officer, was arrested in August.

Two other former board members and directors of two subsidiaries were arrested early this month.

Vinashin was on the verge of bankruptcy this year. As of the end of August, Vinashin’s debts amounted to VND86 trillion ($4.4 billion).

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Another Vinashin official arrested

Another former official from the state-owned Vietnam Shipbuilding Industry Group, often known as Vinashin, was arrested Saturday amid an investigation into financial activities at the company.

To Nghiem, chairman of Cai Lan Shipbuilding Industry Company, a Vinashin subsidiary, was detained on charges of “deliberately acting against the state’s regulations on economic management, causing serious consequences.”

Nghiem, 51, was suspected of “appropriating state properties worth tens of billion of dong” when using second hand equipment for a power plant project.

Since it began operations in April 2007, the Diesel Cai Lan Power Plant has faced technical problems and shutdowns, leading to losses of more than VND62 billion.

Vietnamese police have already arrested five former Vinashin officials. Pham Thanh Binh, the company’s former chairman and chief executive officer, was arrested in August.

Two other former board members and directors of two subsidiaries were arrested early this month.

Vinashin was on the verge of bankruptcy this year. As of the end of August, Vinashin’s debts amounted to VND86 trillion ($4.4 billion).

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Vinashin told to report on debt solutions

The Government on Sept. 8 directed the State owned shipbuilding giant
Vinashin to report its existing bank credit debt and propose debt
solutions.

Vinashin must deliver the report by Sept. 13.

Deputy Prime Minister Hoang Trung Hai instructed relevant ministries
and agencies to stabilise production and operations, pay its employees
and restructure personnel.

The group's managers and
member companies conduct online meetings every week to review tasks and
to solve emerging problems. The group was instructed to provide social
insurance to its employees.

More than 5,000 Vinashin
workers, or almost 10 percent of its workforce, lost their jobs when
the company failed to pay 234 billion VND (12 million USD) in salaries
and social insurance in June.

Newly-appointed
Vinashin General Director Nguyen Quoc Anh said that Vietnam 's
shipbuilding industry had potential. He said the group was working to
overcome the hard times.

The Government Office reported that Vinashin's total debt was 86 trillion VND (4.41 billion USD) at the end of last month./.

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Four more detained at debt-laden shipbuilder

HCMC – Ministry of Public Security police have arrested four more former senior executives of the debt-laden shipbuilding giant Vinashin in a high-profile mismanagement case, according to a statement of the ministry.

The statement, which was posted on the Government site at about 3:30 p.m. last Friday, half an hour after Lt. Gen. Hoang Kong Tu, chief investigator of the ministry, called a news conference in Hanoi, says the four are accused of intentionally violating state regulations causing serious consequences.

Tran Quang Vu – who succeeded Pham Thanh Binh as general director of Vinashin shortly after the Party Central Committee’s Commission for Inspection proposed disciplining the then chairman and general director Binh over mismanagement two months ago – is among the four put into police custody last Friday for interrogation.

Late last month Prime Minister Nguyen Tan Dung signed a decision suspending Vu from the board of directors of the state-owned Vietnam Shipbuilding Industry Group (Vinashin) and asking the board to suspend him from the post of general director.

Tran Van Liem, another board member and chief controller who was also suspended by the Government leader, is the second to be arrested. The other two are Nguyen Van Tuyen, ex-general director of Hoang Anh Shipbuilding Industry Co. Ltd., and Nguyen Tuan Duong, ex-chairman of Cuu Long Investment Co.

The Ministry of Public Security statement says clues were uncovered during the probe into Pham Thanh Binh, who was arrested in Hanoi early last month over intentional violations of State rules on economic management which caused serious consequences and put Vinashin on the brink of bankruptcy. Vinashin’s total debt is VND86 trillion (about US$4.5 billion) while its combined assets are VND104 trillion.

The clues indicate the Prime Minister’s instructions had not been strictly implemented and violations of regulations on economic management causing serious consequences committed in connection with the purchase of a secondhand Italian-built ship locally known as Hoa Sen, the development of Song Hong power station and the sale of a mortgage asset by Nam Trieu Shipbuilding Industry Corporation (Nasico).

Tran Quang Vu, while serving as Nasico CEO, was aware that the Government did not allow the buying of used vessels but he and the then Vinashin chairman Binh approved a plan to convert Bach Dang Giang ship, which Vinashin had bought for steel, into a floating hotel.

Vu used the ship as collateral to borrow VND105 billion from Vinashin Finance Co. with funding coming from an international Government bond sale. But finding that the vessel could not be converted, Vu ordered its dismantlement for steel scrap without seeking consent from Vinashin leadership and reporting to Vinashin Finance.

The money gained from the sale of the steel scrap was not returned to Vinashin Finance, according to the ministry’s statement.

Tran Van Liem was assigned by Binh to oversee the project to buy Hoa Sen ship but he did not organize a competitive tender. Even worse, he signed the purchase contract before the project was formulated, and no technical inspection was done before delivery, the acts that went against a Government decree on ship buying.

Nguyen Van Tuyen of Hoang Anh Shipbuilding Industry Co. Ltd., and Nguyen Tuan Duong of Cuu Long Investment Co., together with Pham Thanh Binh, decided to build Song Hong power plant in Nam Dinh Province though they all knew the Government had not permitted it.

Tuyen and Duong bought equipment made in the 1960s from two old power stations in South Korea which stopped generation in 2004, including transformers containing a toxin which was banned from export by South Korea and prohibited from import by Vietnam.

The two even used falsified documentation in the name of the ministries of Natural Resources and Environment, and Industry and Trade to facilitate the import of the equipment.

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Four more Vinashin officials arrested

Police arrested four senior officials at Vinashin and its subsidiaries Friday amidst an investigation into the state-owned shipbuilder which was on the verge of bankruptcy.

Board members Tran Quang Vu and Tran Van Liem were arrested on charges of "deliberately acting against the state’s regulations on economic management, causing serious consequences.” Vu, also Vinashin chief executive officer, and Liem were suspended last weekend.

Two other officials – Nguyen Tuan Duong, chairman of Cuu Long Vinashin Steel Company and CEO of Cai Lan Steel Company, and Nguyen Van Tuyen, director of Hoang Anh Shipbuilding JSC – were also taken into custody Friday on similar charges, just one day after their sacking.

Police said in a statement published on the government website that the decision to arrest the officials was based on evidence gathered so far as well as statements given by Vinashin former chairman Pham Thanh Binh, who was arrested August 4.

Investigation into the shipbuilder's management is continuing, according to the statement.

The investigation began in July as Vinashin was about to go under with debts amounting to US$4.5 billion.

The government has pledged to restructure the shipbuilder, reverting to a focus on its core areas of operation.

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Gov’t to bail out troubled shipbuilder

The government will take drastic measures and supply more capital to state-owned Vietnam Shipbuilding Industry Group and help it finish ongoing projects, Deputy Prime Minister Nguyen Sinh Hung said Saturday.

Hung's statement came during a meeting with several members of the group. He encouraged them to stay strong and try to maintain production.

The group, known as Vinashin, is on the verge of bankruptcy with accumulated debts of VND86 trillion (US$4.5 billion). The government has ordered an immediate restructuring of the group, retraining focus on its core business of shipbuilding.

“Local banks have worked with Vinashin to develop a shipbuilding industry,” Hung said. “Now that the industry faces difficulties, banks should continue to go along with shipbuilding factories to complete the construction of unfinished ships. Ships have to be finished to be sold so that debts can be repaid.”

Hung will chair a steering board overseeing the restructuring process.

According to an August 4 statement on the government website , Vinashin faced the threat of orders worth $700 million being cancelled.

Nguyen Duc Than, general director of Ha Long Shipbuilding, a Vinashin subsidiary, said capital was in fact the biggest problem for the company now.

“Without enough capital to build ships, the chance is high that contracts will be cancelled,” he said.

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