Giant seafood processors go bankrupt

VietNamNet Bridge - Business losses and wasteful spending resulting in trillions of VND debt have caused many seafood processing companies in the Mekong Delta to go insolvent. Some have had to go to jail.

1. Phan Ba Tong - Thien Ma Seafood Company


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Phan Ba Tong


Coming from a well-off family in the southern province of Ca Mau, Phan Ba Tong, 42, studied well, and is especially good at English. In 2000, he served American traders in the field of fisheries export. Tong quickly became a seafood agent to export seafood products to the US, mainly catfish filets.

Thanks to stable input and competitive prices, his products were exported more and more to the US. Some catfish processing plants cooperated with Tong to process and export catfish to the US. Since then a new door opened for Tong.

In 2005, Tong established Thien Ma Seafood Import and Export Co., Ltd. Doing business well, he was supported by many banks. He built three seafood processing plants; 12 seafood farms totaling 100 hectares to ensure raw material output of 40,000 tons per year. During the golden time, Thien Ma Company earned export revenues of $50-$70 million a year, creating jobs for 3.000-4,000 workers.

Tong began wasting money on luxury things, such as a Hummer H2 imported from the US and expensive services.

In 2010, the Vietnam catfish industry entered a period of crisis and Thien Ma Company could not escape from that harsh spiral. With huge bank debts at high interest rates, Thien Ma borrowed new loans to repay the old ones so he sank further in debt. In late 2012, Thien Ma continued getting losses and failed to pay the debt of nearly VND600 billion ($30 million) to banks in Can Tho, Hau Giang province and businesses, fish breeders...

He called on investors and debt trading companies to engage in debt restructuring and asked banks to freeze the debt, but his financial situation did not improve.

Failing to pay the VND700 billion ($35 million) debt, on March 31 Tong and his chief accountant were arrested.

2. Lam Ngoc Khuan – Phuong Nam Seafood


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Lam Ngoc Khuan


As a famous businessman, Lam Ngoc Khuan, former Chairman of the Phuong Nam Food Processing Joint Stock Company in the southern province of Soc Trang, won the trust of many credit institutions. Khuan told his employees to use tricks to cheat many banks.

From 2008 to late 2012, Khuan made false documents to raise the inventory of seafood products in his warehouses and mortgaged the products to borrow money from five banks to "buy raw shrimp, pay salary to workers, buy equipment, upgrade and repair workshops and conduct shrimp export contracts." However, most of the loans worth tens to hundreds of billions VND were used for wrong purposes.

The total amount of loans from Phuong Nam Bank was up to over VND16,000 ($80 million). Of these, more than VND9,789 billion was used for wrong purposes: to pay debt at a VND9,594 rate, and invest in real estate VND142.7 billion;  Khuan appropriated over VND52 billion.

According to the police, due to continuous losses for five years, Khuan lost ability to pay debt. He directed his daughter and staff to make false documents so they could keep borrowing money.

From 2008 to 2012, Phuong Nam Seafood got losses of over VND996 billion and the value of its collateral was only VND640 billion. Khuan, his daughter and subordinates appropriated over VND471 billion from banks. Khuan’s daughter and chief accountant assisted him to appropriate over VND720 billion.

Khuan and his daughter fled overseas. They are being hunted internationally. Khuan’s subordinates were sentenced from two to 14 years in prison.

3. Pham Thi Dieu Hien - Binh An Seafood

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Pham Thi Dieu Hien


Pham Thi Dien Hien Began trading wood 20 years ago in the southern province of Soc Trang, As Chairwoman and CEO of Binh An Seafood Company (Bianfishco) she quickly became one of the richest persons in the Mekong Delta and also the region's largest debtor when the authorities investigated and discovered that Bianfisco and Dieu Hien were heavily indebted and failed to pay debts of hundreds of million USD.

Specifically, at the end of 2012, the authorities discovered that Bianfishco was in debt at 10 commercial banks with total loans of up to VND1,300 billion. Of the total debt, over VND1,200 billion was Bianfishco’s debt, and the rest was the debt of Dieu Hien Construction & Trade Ltd. and Dieu Hien’s personal debt.

Bianfisco also owed fish breeders VND264 billion and avtax debt of about VND11.5 billion.

Failing to pay debt, Dieu Hien went to the US for medical treatment. Her husband - Tran Van Tri - was authorized to replace Dieu Hien as the director general of Bianfishco. The Saigon - Hanoi Commercial JSC (SHB) agreed to inject capital and guarantee to release the collateral.

One of the mortgaged properties was 25 million shares owned by Dieu Hien and the shares were transferred to SHB to own 50% of charter capital of Bianfishco (replacing Hien) and became the founding shareholders of the company. Bianfishco also changed business registration certificate with the new legal representative - Mr. Tran Van Tri.

Though the company is run by a new owner, the business situation has not been bright. Hien's creditors still have not seen the hope of getting their money back.

The fisheries sector also witnessed dozens of entrepreneurs who went to jail for appropriating assets: Nguyen Huu Thanh, former General Director of Dai Duong Food JSC; Huynh Minh Trung, former Director of Nhat Duc Seafood Co., Ltd., Tran Tan Hai, former Director of Viet Hai Seafood Processing and Import Export Company; Phan Minh Nhat, Deputy Director of Minh Chau Seafood Processing Ltd.

 
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Son Tung

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