Rice is loaded by Vinafood 2's workers. Officials of Vinafood 2, Viet Nam's top rice exporter, reveals that many of the comapny's affiliates were mismanaged. — File Photo

HA NOI (Biz Hub) — Half of Viet Nam Southern Food Corporation's (Vinafood 2) affiliates suffered a combined loss of around VND450 billion, or US$21.43 million, last year.

This was reported by the Nguoi Lao dong (The Labourer) online newspaper on Monday, citing company reports.

The State-run Corporation is under the Ministry of Agriculture and Rural Development (MARD) and has 14 subsidiaries.

The seven loss making units include Tra Vinh Foodstuff and Agricultural Products with VND164.66 billion, Tra Vinh Food with VND134.52 billion, and An Giang Food and Foodstuff with VND83.19 billion.

Bac Lieu Food lost VND42.34 billion; Tien Giang Food and Agricultural Products lost VND25.13 billion; Ben Tre Food lost VND1.35 billion, and Soc Trang Food lost VND2.7 billion.

Inspections by Vinafood 2 officials revealed that many of its affiliates were mismanaged, and made mistakes in signing trading contracts and advancing money to partners. Some firms even tried to conceal the accurate business data.

Tra Vinh Food Acting Director, Tran Van Tam, attributed the company's loss to its ineffective rice storage programmes and unfavourable market price developments in the last few years.

"We are checking records, so we can't provide any information at this time. The loss that the media has pointed out is just an outdated figure of 2013, and the situation is different now," Bac Lieu Food director Tran Quoc Thong told Nguoi Lao dong.

The losses resulted in irrecoverable debt of about VND420 billion, or $20 million, for the loss making units, and most of them can hardly make payments now with their own equity.

Late last month, the corporation sued the HCM City-based Vo Thi Thu Ha Import-Export and Trading Company for misappropriating money of several affiliates, which were involved in some rice supply contracts. The trading firm owed Soc Trang Food VND26 billion, or $1.24 million.

Truong Thanh Phong, the former General Director of Vinafood 2, said the misappropriated funds had to be reclaimed from early last year, but many firms weren't able to do so and created even larger debts by the end of 2013.

Vinafood 2 General Director, Huynh The Nang, who took over in early April, told the Tuoi tre (Youth) newspaper that he couldn't respond to the press' enquiries at the moment, as company operations were being transferred.

What happened in 2013 was the former board's responsibility, and he was reviewing the issue, he added.

Do Van Nam, director of the MARD's Enterprise Management Department, said the ministry was working on the Vinafood 2 issue. Minister Cao Duc Phat was expected to deliver an official notice to the corporation next week, and clearer data would be available for the media by then.

Nam said the ministry would take firm action against the corporation if it detected any lapses.

Vinafood 2 also has stakes in dozens of other member companies. Under a restructuring programme by the Government, for Vinafood 2 during the 2012-15 period, the corporation has to withdraw capital from about 20 firms, totalling over VND320 billion, or $15.24 million. — VNS