VietNamNet Bridge - Many owners of foreign-invested enterprise in debt to banks, other enterprises and tax agencies have fled, reflecting loopholes in state management.

State management agencies need to strengthen control over FIEs after licensing

The factory of Metacor Vietnam in Phu My I IZ in Phu My Town of Ba Ria-Vung Tau province has closed down.

Prior to that, in early June, Denis Piche, of Canada, CEO of the company, fled through the Moc Bai border gate in Tay Ninh province, leaving an unpaid debt of VND150 billion, including insurance premiums, corporate income taxes and bank debts.

The creditors of Quatron, a steel mill in My Xuan B1-Conac IZ in the same province, invested in by investors from Jordan, Greece and Canada, still cannot collects debts from the enterprise despite many meetings between them and a representative of the debtor.

Reports show that Quatron owes VND100 billion. This includes the debt of VND20 billion to 30 Vietnamese enterprises and debt of $3 million to a commercial bank. It has not paid salaries to workers (VND3 billion) and social insurance premiums (VND10 billion). 

Tuoi Tre reported that the legal representative was absent in the courts, and a person not duly authorized came forward and dealt with the company’s affairs. 

The courts judged that Quatron had to pay debts to enterprises. However, to date, this still cannot be done because the assets have not yet been distrained.

In Ba Ria-Vung Tau alone, more than FIEs had been found owing VND110 billion worth of debts by mid-2018.

Of these enterprises, 20 no longer operate at addresses registered with state management agencies which owed VND30 billion, and three enterprises which stopped operations and owed VND60 billion.

In March, Hoa Binh IZ Board of Management issued a notice looking for BTG Holding, the investor of a 86 million euro brewery and 45 million euro Lac Thinh IZ.

The brewery project suspended its operation in October 2017, and the owner cannot be found.

Analysts, affirming that the situation has become alarming, blame this on loose management of state agencies.

Nguyen Mai, chair of the Vietnam Association of Foreign Invested Enterprises (VAFIEs), said that foreign investors had to take necessary steps related to investment capital, and procedures for visas and money remittances to prepare to flee. However, local authorities could not discover the unusual moves.

To settle the problems, Mai said it is necessary to strengthen control over foreign invested projects after licensing. If investors are slow in implementing projects, their licenses must be revoked. 

In addition, state management agencies also need to keep a closer eye on FIEs that do not pay debts on schedule.

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