The Great Real Estate Project Transfer Debacle: Former Coma 18 Executives Face the Music.

Today, August 9th, the Hanoi People’s Court opened a first-instance trial to prosecute Le Huy Lan (DOB 1962, former CEO of Coma 18 Joint Stock Company) and Nguyen Xuan Phong (DOB 1968, former deputy CEO) for “Violation of regulations on the management and use of state assets, causing waste and loss.” Le Van Khuong (DOB 1955, former Chairman of the Members’ Council of Coma Mechanical and Construction Corporation) was also tried for “Negligence causing serious consequences.”

This morning, representatives from the Hanoi Inspectorate, the Tax Department of Hoang Mai district, and Coma attended the trial as summoned. The Hanoi Department of Natural Resources and Environment and Coma 18 sent a letter of absence for the remaining days of the trial.

According to the indictment, Coma 18 Joint Stock Company, with a chartered capital of over 134 VND (of which the state holds 51% through Coma Mechanical and Construction Corporation), was headed by defendant Lan as its CEO.

In 1994, the Prime Minister decided to allocate 184 hectares of land to the Housing and Urban Development Company under the Ministry of Construction (now Housing and Urban Development Corporation – HUD) as the investor for the Linh Dam Lake Comprehensive Service and Residential Area project.

In 2000, the Hanoi People’s Committee approved the detailed plan for the Linh Dam Lake Comprehensive Service and Residential Area project (VP6 Linh Dam) at a scale of 1/500, with the VP6 Linh Dam land lot designated for a commercial, service, and office rental building. A decade later, the HUD Corporation signed a contract to transfer the VP6 infrastructure to Coma 18, implementing the project.

The contract clearly stated that the land lot could not be transferred or sold to a third party during the implementation period. The Hanoi People’s Committee also approved the construction proposal for this lot. However, in 2013, defendant Le Huy Lan signed a dispatch, No. 409, to the Coma Corporation, requesting permission to transfer the project.

Due to difficulties in the real estate market, the group of defendants, including Khuong and other members of the Members’ Council of Coma, agreed to allow Coma 18 to transfer the project or engage in joint ventures. Subsequently, they also approved the transfer of the project to Private Enterprise No. 1 of Dien Bien Province, owned by businessman Le Thanh Thuan (Muaeng Thanh Group), for a price of no less than 12.9 billion VND.

In July 2013, Coma 18 and Thuan’s company signed a joint venture contract, with Thuan’s company contributing 95% of the total project investment, equivalent to over 12.3 billion VND, and receiving 100% of the business results.

The prosecution stated that Thuan’s company constructed the project in violation of the approved plan, increasing the number of floors from 25 to 37 (from 138 to 840 apartments, an increase of 702 units) and expanding the construction area by 630 square meters. When the VP6 Linh Dam project was sold out and put into operation, the Hanoi Inspectorate concluded that the land use fee for the project was temporarily calculated at more than 74.8 billion VND. By 2023, the Hanoi Department of Natural Resources and Environment issued an appraisal conclusion, indicating that the actions of the Coma 18 leadership in transferring the land to Thuan’s company had caused a loss of more than 64.3 billion VND.