On January 17, Ms. Loan, Chairwoman of the Board of Directors of Vimedimex Pharmaceutical Joint Stock Company, was prosecuted by the Hanoi Prosecutor’s Office for violating regulations on auctioning assets under Article 218 of the Penal Code.
Along with the same charge, the Prosecutor’s Office also prosecuted 8 suspects: Nguyen Quang Hung (Deputy General Director of Vimedimex), Ta Thi Van (General Director of Bac Tu Liem Real Estate Company), Nguyen Xuan Duc (Deputy General Director of My Dinh Real Estate Company), Nguyen Thi Dieu Linh (Director of Hanoi Valuation and Investment Company), Nguyen Ngoc Thang (Deputy General Director of Hanoi Valuation and Investment Company), Nguyen Duc Phuong (Valuation Officer of Hanoi Valuation and Investment Company), Tran Cong Tuyen (Head of Infrastructure and Resettlement Management Department under Dong Anh Project Management Board), Vuong Thi Thu Thuy (Staff of the district-level project management board of Dong Anh).
Bui Thanh Huyen, former deputy divisional head of land and environment management at Hanoi Department of Natural Resources and Environment, and Nguyen Thi Cam Le, an official of Hanoi Department of Natural Resources and Environment, were charged with charges of serious consequences due to negligence. Compared to the indictment issued more than a year ago, the Prosecutor’s Office added these two suspects.
According to the indictment, at the beginning of 2020, Dong Anh District People’s Committee approved a plan to auction land use rights in the area. In which, there is a housing project to be auctioned in the southeastern part of Co Duong, Tuong Duong village. The district’s investment project management board was assigned to organize the implementation.
In August 2020, Hanoi People’s Committee decided to allocate 49,100 square meters of land in Co Duong, Tien Duong commune to Dong Anh district to implement the project. Of which, 16,100 square meters of land were put up for auction for residential land use rights.
This unit has no function of determining the starting price of the land area, but suspect Tuyen, Head of Infrastructure and Resettlement Management Department, asked the valuation company to determine the starting price of the land as a basis for organizing the auction. Through introduction, Tuyen contacted Hanoi Valuation and Investment Joint Stock Company (Vvai) to discuss the land price plan and determine the specific unit price.
After conducting a field survey, the valuation company made tables of revenue, costs, and profits of the investor, as well as the land price. Finally, the land area was determined to be priced at 504 billion VND, about 30-31 million VND/m2.
Immediately after receiving the valuation report, Tuyen requested to adjust the land price down to about 300 billion VND. The valuation company agreed and directly modified the land price on the calculation table, reducing the development revenue so that the land area decreased to 334 billion VND.
Ms. Nguyen Thi Loan. Photo: Vietpharm
With the coordination between Tuyen and help from the land management division officer under the Hanoi Department of Natural Resources and Environment, Vvai was selected to sign a valuation contract with the department. Since it was agreed with Tuyen to “lower the land price”, when issuing the certificates, Vvai created 12 survey questionnaires for appraisal purposes. In conclusion, Vvai issued a valuation certificate determining the land price to be 284 million VND, about 17.6 million VND/m2.
The suspect Cam Le at that time was an official of the land management division assigned to check the valuation certificate’s results and draft the proposal sheet for land pricing. However, without careful examination of the dossier and property checking for comparison, Le accepted the price proposed by Vvai.
Huyen, the deputy divisional head of land and environment management, also did not check, leading to the starting price for the auction being only 17.6 million VND/m2, much lower than the actual value, according to the indictment.
In October 2020, the land valuation council organized a meeting to determine the starting price. The meeting included the leaders of the Finance, Construction, Natural Resources and Environment Departments, the City Tax Department, the People’s Committee of Dong Anh district, and Vvai. They adjusted and agreed on a starting unit price of 18.2 million VND/m2.
When there was a starting price, Ms. Loan used three front companies to participate in the auction, namely Bac Tu Liem Development Joint Stock Company, Thanh Tri Real Estate Company, and My Dinh Real Estate Company. All three companies were directed and managed by Loan, using representatives.
To have money to complete the auction documents, Loan instructed her subordinates to settle all savings accounts, obtaining 9 billion VND. She then requested to transfer 30 billion VND as a deposit for the auction.
Out of 6 applications submitted to participate in the auction, two companies were disqualified for not meeting the conditions, and one company voluntarily withdrew. Only 3 companies, all of which were controlled by Loan, passed the document review to participate in the auction.
To ensure winning the auction, Loan instructed her subordinates to bid according to a predetermined scheme. In the first bidding round, all three companies bid equally and at the starting price of 18.2 million VND/m2. In the next two rounds, the three companies all bid equally and added one step price.
In the fourth bidding round, all three companies did not bid and wrote the same message: “Not continuing to bid”. The purpose of this was for the auction company to organize a draw to select the winning unit. As a result, Bac Tu Liem Development Joint Stock Company won the land auction with a price of 326 billion VND, equivalent to 20.1 million VND/m2. With the approval decision for winning the auction, Loan instructed the bank to borrow 350 billion VND to pay the entire land use fee.
After receiving the land, from January 2021 to August 2021, Loan approved Belleville Real Estate Company in Hanoi to sell 21 out of 96 villas and townhouses, earning 311 billion VND. Although only winning the auction at 20.1 million VND/m2, Loan sold it at a price of 86.3 million VND/m2, according to the indictment.
The Prosecutor’s Office determined that the collusion to lower the land price by Loan and the accomplices caused more than 135 billion VND in damage to the state budget. During the investigation process, Loan completely remedied the consequences caused by the misconduct.
In addition to the defendants who were indicted, the Prosecutor’s Office also identified the responsibility of the members of the Hanoi People’s Committee’s land valuation council, but their responsibilities do not reach the level of being prosecuted.