AVG makes partial MobiFone payment after ending agreement

The MobiFone’s acquisition of AVG ended after it was found irresponsible and broke regulations in the acquisition. — Photo VnEconomy

Audio Visual Global (AVG) has paid VND2.5 trillion (US$109.5 million) to MobiFone, a State-owned business under management of the Ministry of Information and Communications, after the two sides cancelled the mutual share transfer agreement on March 12.

This amount is part of the total VND8.89 trillion MobiFone paid to acquire AVG.

The deal was ended after the Govenment Inspectorate (GI)’s inspection found that MobiFone was irresponsible and broke regulations in the acquisition, especially in the assessment of AVG’s financial situation, allegedly leading to State budget losses of over VND7 trillion.

Speaking at the Government’s monthly press conference in Ha Noi on Monday, Deputy Minister of Information and Communications Hoang Vinh Bao said according to the commitment of AVG, it would refund the money MobiFone had paid within 90 days of the agreement’s signing.

At the conference, representatives of ministries and sectors were asked many questions by journalists about MobiFone’s acquisition of AVG, cancellation of the deal and refund of the money that MobiFone had transferred to the shareholders of AVG.

The acquisition of 95 per cent of AVG shares was announced by MobiFone in January 2016. In the parent company’s separate financial report for 2015 and the first six months of 2016, MobiFone announced it had paid 95 per cent of AVG’s total paid-up capital of VND8.89 trillion.

On March 12, 2018, shareholders and members’ council of AVG and the Directorate of MobiFone agreed to cancel the transfer of 344.66 million shares and refund each other the amount received under the agreement. The meeting agreed in principle that AVG shareholders and MobiFone had terminated the contract, MobiFone would return the entire AVG stake to the group of shareholders and shareholders would refund the full amount MobiFone had paid, in addition to interest and related expenses.

The agreement was reached after the Party Central Committee’s Secretariat asked the Government to quickly release the inspection results of the acquisition by communications giant MobiFone.

Three weeks ago, the GI asked Prime Minister Nguyen Xuan Phuc to present these inspection results to the Ministry of Public Security for further investigation, calling the case extremely serious. — VNS