Vietnam arrests former head of telecom giant MobiFone for illegal TV deal

Created 11 July 2018
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The former chairman of MobiFone allegedly gave the information ministry untruthful reports on the deal to acquire AVG.

Vietnam arrests former head of telecom giant MobiFone for illegal TV deal

 

Police in Vietnam on Tuesday arrested a former head of state-owned telecom giant MobiFone and an information ministry official for violations regarding a serious loss-incurring deal at the company.

Le Nam Tra, 57, former chairman and general director of MobiFone, and Pham Dinh Trong, 48, head of the Department of Enterprise Management under the Ministry of Information and Communications, are facing charges of "violating regulations on the management and use of public capital, causing serious consequences."

Both Tra and Trong had already been expelled from the Communist Party last month for their violations.

The arrests of Tra and Trong are part of a newly-launched criminal investigation into MobiFone's deal to acquire private pay TV firm Audio Visual Global JSC (AVG), which could cause an estimated loss of about VND7 trillion ($307 million) to the state, according to government inspectors.

In a report on the deal in March, the Government Inspectorate concluded that MobiFone had committed multiple violations in proposing the deal and evaluating AVG's value. Additionally, the company provided untruthful, incomplete information and incorrectly evaluated AVG's financial state in its report to the information ministry on the deal.

As chairman of MobiFone at the time of the deal, Tra was found responsible for these violations, which resulted in MobiFone spending VND8.89 trillion on purchasing a 95 percent stake in AVG instead of VND1.9 trillion, causing a loss of VND7 trillion.

Trong, who served as head of the information ministry's unit responsible for evaluating the deal, was meanwhile found to have failed to take into consideration critical opinions of some of the unit's members when performing the evaluation. He allegedly advised the ministry to approve the acquisition even though its pricing and effectiveness had yet to be determined and the prime minister had yet to approve a policy for such projects.

Following its inspection into the deal, the Government Inspectorate concluded that it was a serious incident and transferred relevant documents on the case to the Ministry of Public Security for a criminal investigation.

MobiFone, the country's third largest telco, had made headlines since early 2016 when it announced it was breaking into the pay TV market with the acquisition of a 95 percent stake in AVG, without revealing any information about the deal.

In August 2016, the Vietnamese government ordered an across-the-board inspection into the acquisition.

After government inspectors concluded that the deal had violated investment laws and caused massive losses to the state budget, MobiFone in May said it had been refunded in full by AVG after the deal between the companies fell through.

The case has however been put under the spotlight of Vietnam's corruption crackdown spearheaded by the Communist Party's General Secretary Nguyen Phu Trong, with multiple ministries being found responsible for violations surrounding the acquisition.

The fight against corruption, which has netted scores of high-ranking officials and businesspeople over the past few years, would keep up momentum and continue moving forward, sparing no one, according to Trong.

 

Source: VNE

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