VietNamNet Bridge – The Vietnam Association of Financial Investors (VAFI) on June 13 sent a list of questions to the Ministry of Industry and Trade (MoIT), including one about the appointment of former Minister Vu Huy Hoang’s son to key positions at some big State-owned firms.
Vu Quang Hai.
VAFI also sent the document to the Central Inspection Commission, Deputy Prime Minister Vuong Dinh Hue, the Ministry of Home Affairs, Government Inspectorate and tens of central agencies.
Hoang’s son - Vu Quang Hai - was appointed as a member of the Board of Directors cum the Vice Chief Executive Officer of the Saigon Beverage Corporation (Sabeco) in early 2015, at the age of 28. Thus, Hai is the representative of the State’s VND12 trillion in Sabeco.
Hai took office at Sabeco while his father Vu Huy Hoang was serving as Minister of Industry and Trade.
Earlier, in 2011, he was appointed as the CEO of the PetroVietnam Finance Investment JSC (PVFI), at the age of 25.
In 2011-2012, under Hai’s management, PVFI made losses of up to VND220 billion ($10 million) out of its total chartered capital of VND300 billion ($13.5 million). Despite the huge losses, a year after the losses was reported, he was moved to the MoIT’s Vietnam Trade Promotion. At this time, according to VAFI, PVFI was almost paralyzed while, whether it is a public company, all information about PVFI was hidden.
After only about one year working at the Trade Promotion Department as deputy director of the Center for Export Support, Hai was promoted to the Vice CEO at the giant firm Sabeco.
According to VAFI, Hai couldn’t be appointed as Vice CEO of Sabeco as he was legally liable for the massive losses accumulated during his time at PVFI.
"The public is wondering why Vu Quang Hai was too young, with no experience in the financial sector, was assigned such a great responsibility? People explained that because Vu Quang Hai is the son of Mr. Vu Huy Hoang, but the appointment is entirely contrary to the provisions of the state", VAFI wrote.
"Vu Quang Hai served as a public servant for merely a year, did not know anything about policy making and was still under penalty (according to current regulations, the CEO of the firms making losses in two consecutive years is dismissed) but he was promoted. This is a completely wrong decision that is contrary to government regulations," VAFI wrote.
For the equitisation of MoIT’s subsidiaries, VAFI raised doubts that why to date the Ministry has not yet transferred the Hanoi Beverage Corporation (Habeco) and Sabeco to the State Capital Investment Corporation (SCIC) as regulated although these firms have been equitised for nearly eight years.
“Would this be because if former Minister of Industry and Trade Hoang had handed Sabeco to the SCIC, his son would have had no chance of becoming Sabeco’s leader?” VAFI questioned.
"If Minister Vu Huy Hoang transferred to Sabeco to SCIC in accordance with the regulations, the appointment of Mr. Hoang’s son and secretary to the most powerful positions in Sabeco would have not happened," VAFI wrote.
According to Article 100 of the Enterprise Law, if a ministry is the representative of a State stake in an enterprise, the minister is banned from appointing his wife, parents, children or siblings as director or general director of this enterprise.
In addition to questioning the former Minister of Industry and Trade, VAFI also questioned the role of the official who was assigned to manage Habeco and Sabeco - Deputy Minister of Industry and Trade Ho Thi Kim Thoa – in signing the decision to appoint Hai to the key positions at Sabeco.
Finally, VAFI proposed that Hai and those who made the decision on the appointment shall be liable to pay damages to shareholders of PVFI.
Sabeco’s after-tax profit in 2015 has been reported at nearly $153 million, a 25.5 per cent increase against 2014. Its 2015 full-year turnover increased 2 per cent to $361 million, according to the company’s consolidated financial report.
Sales rose 2 percent to $335 million, pushing up gross profit by 2.5 per cent against 2014 to more than $26 million. Revenue from financial operations stood at $163 million, a year-on-year increase of 21.3 per cent.
According to a report from the Vietnam Beer Association, in 2015 the Vietnam’s beverage industry produced over 3.4 billion liters of beer, an increase of 40 per cent compared to 2010. Vietnam currently has 129 breweries, most of which are in large cities and provinces such as Hanoi, Ho Chi Minh City, and Thua Thien Hue.
The majority of the market is still controlled by Sabeco, Habeco and multinational breweries like Heineken and Carlsberg. The country’s beverage industry is forecast to have a capacity of 4.25 billion liters of beer, 9.2 billion liters of non-alcoholic beverages, and 360 million liters of spirits by 2020.
What does the former Minister say?
Former Minister Vu Huy Hoang.
Former Minister Hoang claimed the proposal to appoint his son was a Sabeco proposal, and it had also been approved by the ministry’s party organization.
He explained that the Sabecome chairman Phan Dang Tuat had sent a letter to the MoIT in late 2014, asking for the appointment of Hai for the position to fill the vacancy.
“Based on Sabeco’s request, Hai is qualified, so we decided to move him to the firm”, Hoang said.
Regarding the $10 million losses at PVFI, Hoang claimed that this was accumulated from previous years before his son was appointed in 2011 by PetroVietnam, so, it was not his responsibility.
Hoang also said there was a document signed to prove the losses resulted from the old director when Hai took his position at PVFI. Under his son’s leadership, PVFI’s losses were curbed and during the 2012-2013 period, the firm made a small profit.
“Until now, I’ve not yet received any document from VAFI. I have not done anything unclear and for the individual purpose, so, I’m unafraid of answering any questions. I’m willing to accept responsibility if I made any mistakes,” the former minister said.
Compiled by Khuyen Bui