Government Inspectorate points out a series of violations related to DIC Group

The Government Inspectorate pointed out many limitations and violations related to the equitization and divestment of state capital at the Development Investment - Construction Company (now the Construction Development Investment Joint Stock Corporation).

The Government Inspectorate has just issued a notice of inspection conclusions on compliance with the law in equitization and divestment of state capital at the Development Investment - Construction Company (now the Development Investment Construction Joint Stock Corporation - DIC Group).

The Government Inspectorate has just issued a notice of inspection conclusion at the Development Investment - Construction Company (now the Construction Development Investment Joint Stock Corporation - DIC Group).

PHOTO: DIC

Many limitations and shortcomings in equitization

According to the inspection results, the legal basis of the Ministry of Construction is Decree 187/2004 to prepare the enterprise equitization plan, which is not in accordance with regulations. In addition, the decision of the Ministry of Construction to approve the value of the equitized enterprise based on the results of the examination of the determination of enterprise value by the Department of Financial Planning, which was not examined by the Equitization Steering Committee, is also not in accordance with regulations. The above limitations, shortcomings and violations lead to a number of procedures not being carried out according to regulations. Typically: The Development Investment - Construction Company did not prepare a land use plan; Not determining the value of geographical location advantages for leased land as urban land to calculate into the enterprise value (however, the regulation on determining the value of geographical location advantages for leased land is no longer applicable according to the provisions of Decree 59/2011, in case it has been calculated into the enterprise value, it can be deducted from the annual land rent according to the provisions of Decree 189/2013). According to the inspection agency, the consulting unit, Vietnam Valuation and Appraisal Joint Stock Company (VIVACO), incorrectly determined the investment capital and original price of 2 construction works on the land, leading to the assessed asset value being lower than the regulation by more than 2.4 billion VND. VIVACO also did not re-determine the value of land use rights for 25 villas in Phuong Nam Villa Area, which is not in accordance with the regulations. However, the revenue from the transfer of 14/25 villas after January 1, 2007 has been accounted for in the business results of the state-owned enterprise according to regulations; the remaining 11 villas have been determined by the State Audit to have additional land use fees. The Investment Development - Construction Company has paid into the Enterprise Arrangement Support Fund after the Ministry of Construction issued a decision approving the value of state capital at 0:00 on March 13, 2008 to transfer the state-owned enterprise to a joint stock company. The inspection results also show that VIVACO and the Ministry of Construction did not re-determine the value of land use rights for the Dai Phuoc Eco-tourism Urban Area project but used the aggregate of investment costs and the value of project development rights to calculate the value of the equitized enterprise. This is not in accordance with the provisions of Decree 17/2006...

Accounting for losses is not in accordance with regulations.

The Government Inspectorate also determined that, in the process of settling the value of state capital, the Development Investment - Construction Company accounted for the losses of 3 subsidiaries (from the time of determining the value of the enterprise equitizing the subsidiary to the time of converting the subsidiary into a joint stock company), which was approved by the Ministry of Construction to be settled into the value of state capital at 0:00 on March 13, 2008 for handover to the joint stock company. This is not in accordance with the provisions of Clause 4, Article 21 of Decree 109/2007. The Ministry of Construction and the representative of state capital at the Development Investment - Construction Joint Stock Corporation need to clarify the causes and responsibilities for the above losses. Regarding the issue of private shares, the Government Inspectorate determined that the Ministry of Construction issued documents approving the policy of issuing and offering private shares to increase charter capital, thereby directing the price of private shares to be consistent with the market price at the time of issuance. The Board of Directors has submitted to the General Meeting of Shareholders of the Construction Development Investment Corporation a decision on the minimum selling price of VND 100,000/share and the Board of Directors of the Corporation has offered the shares at VND 100,000 and VND 102,000/share according to Clause 1, Article 87 and Article 96 of the 2005 Enterprise Law. However, the Ministry of Construction, as the owner, has not fulfilled its responsibility in directing the private offering price of shares in 2009 and needs to be reviewed and handled according to regulations.

The Government Inspectorate pointed out many limitations and violations related to the equitization and divestment of state capital at the Development Investment - Construction Company (now the Construction Development Investment Joint Stock Corporation).

PHOTO: PHUC BINH

Another content is the order and procedures for divestment and the determination of share value for state capital divestment. The inspection results show that the Ministry of Construction issued a document approving the state capital divestment plan at the Construction Development Investment Joint Stock Corporation without consulting the Ministry of Finance and the Ministry of Planning and Investment, which is not in accordance with the provisions of Decree No. 91/2015. The Construction Development Investment Joint Stock Corporation provided incomplete information, leading to the consulting unit not re-determining the land use right value of 3 land addresses to ensure that it is close to the market price at the time of share valuation. The total amount not yet determined at market price to be included in the provisional share valuation is estimated at VND 1,821/share, the estimated share price will be VND 14,251 (= the price determined by the consultant is VND 12,430 + VND 1,821). However, the valuation results of the consulting unit and the trading price history on the stock market of the stock code DIG were consulted by the Ministry of Construction, on that basis the Ministry of Construction determined the minimum share selling price to be VND 15,000, higher than the valuation price of the consulting unit (VND 12,430); the matched selling price on the Stock Exchange was VND 19,250/share, higher than the price determined by the Ministry of Construction. Meanwhile, according to the provisions of law on the method of transferring state capital, the selling price of shares by the matched selling price on the stock exchange will be decided by the market.

Whose responsibility is it?

According to the Government Inspectorate, the responsibility for violations of procedures in the process of equitization of enterprises belongs to the Steering Committee for Equitization of the Development Investment - Construction Company, the leadership of the Ministry of Construction in the period of 2007 - 2008 and related organizations and individuals. The responsibility for violations in determining the value of assets when determining the value of equitized enterprises mainly belongs to the consulting unit VIVACO, and at the same time, there is also a part of the responsibility of the Steering Committee for Equitization of the Development Investment - Construction Company, the leadership of the Ministry of Construction in the period of 2007 - 2008 and related organizations and individuals. The responsibility for not re-determining the value of land use rights but using the method of assembling investment costs and the value of the development rights of the Dai Phuoc Eco-tourism Urban Area project into the value of the equitized enterprise belongs to the Steering Committee for Equitization of the Investment Development - Construction Company, the leaders of the Ministry of Construction in the period of 2007-2008 and related organizations and individuals. The responsibility for violations in accounting for losses of subsidiaries in the process of settling state capital at enterprises belongs to the Steering Committee for Equitization of the Investment Development - Construction Company, the leaders of the Ministry of Construction in the period of 2008 and 2016 and related organizations and individuals. Responsibility for directing the private offering price of shares in 2009 belongs to the leaders of the Ministry of Construction in 2009. Responsibility for shortcomings in procedures in approving the State capital divestment plan at the Construction Development Investment Joint Stock Corporation under the Ministry of Construction, the leaders of the Ministry of Construction in 2016 - 2017 and related organizations and individuals. Responsibility for not providing sufficient information to re-determine the value of land use rights of 3 land locations when appraising the price of shares for divestment belongs to the representative of the State capital portion at the Construction Development Investment Joint Stock Corporation.

Transfer to the investigation agency if there are signs of criminality

Based on the above inspection results, the Government Inspector General has recommended that the Prime Minister direct the Ministry of Construction to organize a review to take appropriate disciplinary action against the Ministry's leadership in the 2007-2008 and 2016-2017 periods and related organizations and individuals for allowing the limitations and violations mentioned in the inspection results section above. Urge related organizations and individuals to remedy the amount of violations in determining the value of assets on land stated in the appendix attached to the inspection conclusion; determine the causes of losses at DIC Joint Stock Company No. 1, DIC Construction Materials Joint Stock Company and DIC Tourism Joint Stock Company to take measures to handle the losses that have been settled into the value of state capital at the Development Investment - Construction Company in accordance with regulations. At the same time, clarify the direction on the price of private offering of shares in 2009; Review and clarify the failure to re-determine the land use rights value of 3 land locations during the process of stock valuation for divestment of state capital at the Construction Development Investment Joint Stock Corporation.... "In the process of reviewing, examining, handling and overcoming the above limitations and violations, if signs of criminal law violations are detected, the Ministry of Construction will transfer the information to the investigation agency for consideration and handling according to its authority," the Government Inspectorate emphasized.

Thanhnien.vn

Source: https://thanhnien.vn/thanh-tra-chinh-phu-chi-ra-hang-loat-vi-pham-lien-quan-tap-doan-dic-185240828185247668.htm