VietNamNet Bridge - If Keangnam goes bankrupt, Keangnam residents would lose a total of VND160 billion, which is the fee they pay when buying apartments.

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Lawyer Truong Thanh Duc, Chair of Basico, a law firm, said it was highly possible that the apartment buyers would lose money. In principle, this is the sum of money Keangnam owes local residents. However, if Keangnam goes bankrupt, it may not be able to pay the money back.

Referring to the 2014 Bankruptcy Law, the money Keangnam owes to apartment buyers is not the priority debt that the bankrupt company has to pay. This means that the assets and money Keangnam has will be used to pay the other debts first before they are paid to the apartment buyers.

In many cases, the assets and money that enterprises have when declaring bankruptcy are not big enough to pay all the debts;  therefore, the creditors with low priority orders cannot get their money back.

Duc noted that this is a major problem of the 2006 Housing Law and the 2014 Bankruptcy Law which took effect on July 1, 2014.

Some days ago, South Korean press reported that Keangnam Hanoi Landmark Tower was offered for sale at $800 million. 

The local residents have sent a document to the Prime Minister asking for help in anticipation of the loss of the money.

The Ministry of Construction’s Decision No 08 released in May 2008 on the regulations on apartment building management stipulates that the maintenance fund, equal to 2 percent of the building value, must be handed over to the building administration board after it is established, so that the board can pay for building maintenance activities. 

The document showed that with the average selling price of VND60 million per square meter, the maintenance fund for the 922 high-end apartments sold would be roughly VND160 billion. 

Meanwhile, the investor – Keangnam – has not handed over the fund to the building administration board as required by law.

It is still unclear about the scale of the maintenance fund. While local residents affirmed the fund has VND160 billion, Keangnam said it is VND125 billion.

The administration board said it has sent eight documents to the investor and two documents to the Minister of Construction and the Hanoi Communist Party Central Committee’s Secretary, asking for local authorities’ intervention. However, they have not received any reply.

In December 2014, Keangnam Vina admitted that it has collected VND125 billion for the maintenance fund, and it has used the amount of money for wrong purposes.

In March 2015, Keangnam Vina suggested that it would pay VND5 billion every year and would pay all the VND125 billion within 25 years. However, the proposal has been rejected.

Duy Anh