The Ministry of Public Security’s Investigation Police Agency (C46) has launched criminal proceedings against law violations relating to the State-owned telecommunication giant Mobifone’s purchase of 95 percent of shares of Audio Visual Global JSC (AVG).
Le Nam Tra, former Chairman of Mobifone’s Member Council (Source: Vnexpress.net)
In a statement released on late July 10, the agency announced that it had issued Decision 26/C46-P13 initiating a criminal case on suspected violation of regulations on the management and use of public capital that lead to serious consequences in Mobifone, which is under the management of the Ministry of Information and Communications (MIC), and related agencies.
C46 also began legal proceeding against and ordered the arrest of Le Nam Tra, former Chairman of Mobifone’s Member Council, who is currently an official of the MIC’s Office – and Pham Dinh Trong, Director of the MIC’s Department of Enterprise Management.
Both Tra and Trong are charged with breaching regulations on the management and use of public capital that lead to serious consequences under Clause 3, Article 220 of the 2015 Criminal Code.
They face up to 20 years in prison.
The same day, the Supreme People’s Procuracy approved C46’s decisions and orders.
Earlier on June 27-28, the Party Central Committee’s Inspection Commission held a meeting on applying disciplinary measures against Tra and Trong by dispelling them from the Party.
On July 10, the Party Central Committee’s Secretariat decided to give a formal warning to the Party Committee of the MIC for the 2011-2016 tenure.
According to the Government Inspectorate (GI), Mobifone was irresponsible and broke regulations in the acquisition, especially in assessing AVG’s financial situation, leading to State budget losses of 7 trillion VND, and affecting Mobifone’s finance, resulting in difficulties equitising the company.
AVG faced difficulties from its establishment to the time of business valuation in March 2015, with accumulated losses of more than 1.6 trillion VND, accounting for 45 percent of its charter capital.
However, Mobifone was dishonest in reporting AVG’s financial situation to the MIC during the acquisition.
According to the GI, the assessment violated regulations for investment and managing and using State capital.
The GI stated that the responsibility for the wrongdoings went to the Board of Members, Board of Directors, the chief accountant and other departments of Mobifone.
The GI also said that the MIC, as the representative of the State ownership and the State agency in charge of management of information and communication, showed a lack of responsibility in assessing the acquisition. Its approval of the acquisition had violated legal rules, causing serious losses of State capital and thus must be annulled, the GI said.
In addition, the acquisition was not eligible for being classified as a State secret, but the ministry asked the Ministry of Public Security to include it in the list of classified information, which violated laws on issuing regulations on the publishing of information of State-owned one-member limited liability companies.
MIC officials in charge of the case must bear responsibility for the violations, the GI said.
A day before the GI’s announcement, Mobifone and AVG decided to cancel the transfer of 344.66 million shares and refund each other the amount received under the agreement.
AVG shareholders will refund the entire amount paid by Mobifone, while Mobifone will return to AVG the number of shares and assets transferred. The two sides will also try to not let the other party suffer more damages.
In addition to the amount paid to AVG, Mobifone said it had to pay some related expenses, such as consultants’ fees. AVG has agreed to share this expense with Mobifone.-VNA