Re: VN News (May 15, 1997)

[Huynh Ngoc Chau <huynhnc@sbu.ac.uk>]

IT seems that businesses in Vietnam are having a hard time. But I am 
glad that the downside face of these companies is being uncovered at the 
early stage. After all, this is a good sign that business environment being 
more transparent and we should be happy for that. 

> 13 more people arrested in Minh Phung Corruption scandal
> 
> Hanoi (AFP) - Thirteen more people have been arrested in the widening
> corruption scandal linked to Minh Phung Garment Co in Ho Chi Minh
> City, police said Thursday.
> 
> Those arrested included directors, vice directors and chief
> accountants of the troubled garment and property development company
> whose general director Tang Minh Phung was arrested on corruption
> charges in March.
> 
> All 13 face charges of "defrauding and being accomplices to fraud,"
> police said.
> 
> Ming Phung's troubles first surfaced in March after an affiliate
> company, Export-Import and Tourist District 3 Co, better known as
> EPCO, defaulted on an 18 million dollar debt to state-owned
> Vietcombank.
> 
> Phung was arrested with EPCO director Lien Khui Thin, when the
> collateral Minh Phung had allegedly pledged to the bank was discovered
> missing.
> 
> Minh Phung is one of Vietnam's largest garment manufacturers with more
> than 9,000 employees. Like many high flying private joint stock
> companies it has diversified into property development and
> import-export.
> 
> According to the Tuoi Tre newspaper, Phung began aggressively
> purchasing property instead of concentrating on his core business of
> garment making in 1995.
> 
> By establishing new affiliate companies -- they now number more than
> 20 - Minh Phung was able to raise new capital and evade creditors or
> roll over loans through a complex web of financial transactions
> between different companies.
> 
> EPCO, which has trade offices in Sydney and San Francisco, is a big
> exporter of fertilizer and exporter of coffee with turnover exceeding
> 150 million dollars last year.
> 
> Officials at both EPCO and Minh Phung have refused to talk to the
> press.
> 
> According to the Saigon Giaphong semi-official newspaper, at the time
> of his arrest, Phung told authorities the company owed banks and
> enterprises about 4,310 billion dong (370 million dollars).
> 
> However observers say this case was just the tip of the iceberg and
> that more revelations involving larger sums are expected in the coming
> weeks.
>                  ___________________________________

Cheers,

Chau