Vad debts of fdi firms up to $80m

As per statistics from authorities, more than 230 foreign-invested projects from Taiwanese and Korean investors that had been licensed have been dissolved and gone bankrupt so far.

Notably, some foreign investors used investment licenses to be able to borrow capital from banks, but then they came back home without repayment of the bank loans.

Currently, 22 projects of FDI (foreign direct investment) enterprises in 12 provinces and cities have fallen in insolvency with amount of up to nearly $80 million, mainly in two provinces of Hai Duong and Phu Tho.

In particular, in the northern province of Hai Duong, in 2005, the provincial People’s Committee granted investment license for Kenmark (Taiwan) to invest $500 million in Viet Hoa Industrial Zone.

Kenmark was financed by Saigon Hanoi Bank (SHB)’s Quang Ninh branch, Bank for Investment and Development of Vietnam (Bidv)’s Thanh Do branch, and Hanoi Building Development Commercial Joint Stock Bank (Habubank-HBB)’s Bac Ninh branch with a total amount of $50 million. In 2010, when the investor turned home due to disputes in the project, the loans of Kenmark became significant bad debts in banks.

Vu Van Minh, Director of Vietnam Bank for Agriculture and Rural Development (Agribank)’s Phu Tho branch said some Korean companies borrowed over $12 million from his bank but when the project suffered losses, the investors have returned their homeland.

Agribank’s Phu Tho branch sold entire land, factories and machineries of this company. However, so far, the bank has just recovered only nearly $60,000.

According to experts, many banks often made appraisal of asset value only on the declaration document of the business while FDI firms declared in excess of their actual value to get loans. Therefore, for these non-performing loans (NPLs), professional appraisal department of the bank must bear certain responsibilities.

Facing this situation, on September 19, the prime minister has issued an Instruction No 1617 to leaders of ministries and provincial people’s committees required to review the grant of investment license for FDI projects, including requirements on inspection, supervision for the obligation implementation of investors on the capital contribution schedule and capital mobilization.

Source VIetbiz

Tags: invest in Vietnam, Vietnam FDI, Vietnam FDI 2011, Vietnam investment