Vinashin’s frauds cost $45.35 mln: ministry

State-owned Vietnam Shipbuilding Industry Corporation’s frauds cost the state budget VND907 billion ($45.35 million), the Ministry of Public Security has said.

The ministry also suggested prosecuting 9 top executives at Vinashin and its affiliates for “deliberately acting against the state’s economic management regulations and causing serious consequences.”

In 2007, Vinashin’s chairman cum CEO Pham Thanh Binh ordered Tran Van Liem, director of Vien Duong Vinashin Co. to ignore the Prime Minister’s direction to purchase the used Cartour ship from Italy at the price of 60 million euros ($83.4 million).

The ship was later used as a passenger boat named Hoa Sen (Lotus).

But the boat had to stop operations after only 39 trips because it didn’t make profits. This caused a massive loss of VND470 billion.

Earlier in 2001, Vinashin was approved by the government to buy the MV Rayna vessel from Cambodia at $1.22 million in order to convert it into a transporting ship. But this ship later could make only one trip before being shelved.

In 2006, Tran Quang Vu, CEO of Nam Trieu Shipbuilding Industry Co., asked to take over this ship to turn it into a floating four-star restaurant. But the company later couldn’t afford the converting expense and sought Vinashin’s permission to sell the ship.

Although Vinashin said this ship must be sold for at least VND149.5 billion, Vu eventually sold it for only VND66 billion without Vinashin’s permission.

This deal cost the state budget another VND27 billion. Meanwhile, Binh Dinh Shipbuilding Industry Co. also caused a loss of VND30 billion in its Binh Dinh Star vessel project.

Vinashin also committed other frauds in its Song Hong and Cai Lan thermal-power plant projects, resulting in a loss of VND312 billion and VND66.5 billion respectively.

In 2006, Nguyen Van Tuyen, director of Hoang Anh Vinashin Co., and Nguyen Tuan Duong, chairman of Cuu Long Investment Co., cooperated in the joint-venture of Song Hong Thermal-power Plant.

Duong later contracted Korean company Seobong Recycling to buy two used thermal-power machinery units at $6.8 million and another used unit from Daekyung Machinery at $5.8 million.

On July 12, 2007, Tuan and Duong started construction when authorities were yet to approve their project. A couple of days later, construction was suspended due to out-dated technology and toxic substances found in some of the machines.

Similarly, in 2002, To Nghiem, former chairman of Cai Lan Co. Ltd., contracted Norway’s Jacobsen Elektro As to purchase machinery and equipment for the Cai Lan diesel thermal-power plant before this project was approved.

In June 2005, Binh of Vinashin ordered Nghiem to pay Jacobsen and begin operation even though the plant wasn’t ready. As a consequence, the plant operated poorly, causing a loss of VND57 billion between 2007 and 2009. It had to be shut down in 2009. – Tuoitre

Tags: Vinashin