Deputy Prime Minister Vuong Dinh Hue, has requested the Ministry of Agriculture and Rural Development (MARD) and the Ministry of Finance (MoF) to carry out the equitisation of Viet Nam Southern Food Corporation (Vinafood 2) in accordance with the approved scheme.

This is part of the Deputy PM’s written statement on financial supervision of Vinafood 2 that was sent to the two ministries recently.

Hue asked MARD to host and co-ordinate with the finance ministry to evaluate the results after two years of implementing Prime Minister Nguyen Xuan Phuc’s direction on Vinafood 2’s financial supervision.

He also wanted the two ministries to clarify the shortcomings, subjective and objective causes, responsibilities of units and individuals, and methods. The report will be submitted to the Prime Minister in the first quarter of 2018.

In early July, MARD announced the findings of the Vinafood 2 inspection, pointing out many mistakes in asset management and the loss of subsidiaries worth hundreds of billions of dong.

Specifically, the inspection conclusions indicate that from 2014 to the time of inspection, Vinafood 2 violated regulations when it sold assets on land and transferred the land use rights in southern provinces of Tien Giang and Tra Vinh, with a total value of over VND114 billion (US$5 million).

With regards to high-class hotel projects, office buildings and commercial centres for rent at 34-36-42 Chu Manh Trinh and 33 Nguyen Du, Ben Nghe Ward, District 1, HCM City, the General Director of Vinafood 2 has agreed with Viet Han Group on compensation and site clearance of 34 households on the land. This agreement between the two sides is contrary to MARD’s document and the PM’s direction.

Accordingly, the amount of compensation and site clearance estimated by the two sides was VND68 billion, which would come from the MoF’s Public Property Administration Department. Thus, if it was implemented in accordance with this agreement, the State budget would lose 80 per cent, equivalent to VND54 billion.

As per the 2016 financial report, Vinafood 2 achieved net sales of VND9.95 trillion ($438 million), a year-on-year decrease of 36 per cent and after-tax profit of VND157 billion, up 15 per cent over the previous year. By the end of 2016, Vinafood 2’s accumulated loss stood at VND798 billion. As of December 31, the actual value of the Vinafood 2 parent company was VND14.61 trillion, of which the actual value of State capital was VND5.38 trillion. — VNS