Real estate price manipulation
On February 6, it was reported that the Hanoi People’s Procuracy has indicted Ms. Nguyen Thi Loan (Chairwoman of the Board of Directors of Vimedimex Pharmaceutical Joint Stock Company) for “Violation of Regulations on Auctioning of Assets” under Article 218 of the Criminal Code.
In addition to the aforementioned charge, the People’s Procuracy has also indicted: 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 (General Director of Hanoi Investment and Valuation Company), Nguyen Ngoc Thang (Deputy General Director of Hanoi Investment and Valuation Company), Nguyen Duc Phuong (Valuation Officer of Hanoi Investment and Valuation Company), Tran Cong Tuyen (Head of Infrastructure Management and Land Clearance Department under the Dong Anh Project Management Board), and Vuong Thi Thu Thuy (Specialist at the Dong Anh District Project Management Board).
Bui Thanh Huyen (former Deputy Head of the Land and Environment Department of Hanoi); and Nguyen Thi Cam Le (official at the Land and Environment Department of Hanoi) were also indicted for the crime of “Serious Dereliction of Duty”.
The People’s Procuracy determined that in 2020, the Dong Anh district People’s Committee approved a plan to auction the land use rights in Co Duong village, Tien Duong commune, and assigned the Investment and Construction Project Management Board of the district to organize and implement the land auction.
In August of the same year, the Hanoi People’s Committee decided to assign 49,100 square meters of land in Co Duong village, Tien Duong commune to the Dong Anh district to implement the project, of which 16,100 square meters of land were auctioned for residential use.
However, the defendant Tran Cong Tuyen, Head of the Infrastructure Management and Land Clearance Department, and his unit, who were responsible for determining the starting price of the land, reported to the leadership to ask the valuation unit to determine the starting price as the basis for organizing the auction.
The defendant Tuyen contacted Hanoi Investment and Valuation Joint Stock Company (Vvai) to discuss the land price plan and determine the specific unit price.
At first, the valuation company determined the value of the land at 504 billion VND, around 30-31 million VND/m2. Then, the defendant Tuyen requested to lower the land price to around 300 billion VND.
The People’s Procuracy alleges that the valuation unit agreed with Tuyen and directly adjusted and lowered the land price on the calculation sheet, reducing the development revenue so that the land value decreased to 334 billion VND.
When Vvai issued the valuation certificate, the land price was determined to be only 284 million VND, about 17.6 million VND/m2.
The People’s Procuracy accused the defendant Nguyen Thi Cam Le, who was then an official of the Land and Property Management Sub-Department, of being responsible for checking the valuation certificate and was also the person in charge of drafting the proposal to determine the land price. However, Le did not carefully review the documents and did not check the assets for comparison, so she accepted the price proposed by Vvai.
In October 2020, the land valuation council held a meeting to determine the starting price. The meeting was attended by leaders of the Finance Department, Construction Department, Land and Environment Department, Tax Department, and the People’s Committee of Dong Anh district, as well as Vvai. They adjusted and agreed on a starting unit price of 18.2 million VND/m2.
The “snake feet” system of the female chairwoman
Ms. Nguyen Thi Loan is accused of using three shell companies to participate in the auction: Bắc Từ Liêm Real Estate Development Joint Stock Company, Thanh Tri Real Estate Company, and My Dinh Real Estate Company.
According to the indictment, there were a total of 6 applications to participate in the auction, but only the 3 companies owned by Loan passed the application phase.
In order to secure winning the land auction, Loan requested her subordinates to submit lower bids according to a predetermined method. As a result, Bac Tu Liem Real Estate Development Joint Stock Company won the land auction with a price of 326 billion VND, equivalent to 20.1 million VND/m2.
After receiving the land, from January 2021 to August 2021, Loan approved the sale of 21 out of 96 villas and townhouses to Belleville Hanoi Real Estate Company for a total of 311 billion VND. Despite winning the auction at only 20.1 million VND/m2, Loan sold the properties for 86.3 million VND/m2.
The “price manipulation” behavior of Loan and her accomplices has caused damage to the State budget of over 135 billion VND.