The inspection conclusion clearly states that the Ministry of Construction’s decision to implement the equitization of the Investment and Development Construction Company (now DIC Corp.) and to withdraw capital from this enterprise is in line with the Government’s policies and the Prime Minister’s directives.
The equitization and capital withdrawal ensured the progress in terms of time according to the Government’s and Prime Minister’s directions. However, alongside the achievements, there were still some limitations, shortcomings, and violations in the process of equitization and capital withdrawal of DIC.
DIC Corp., the equitized construction company, has multiple violations.
The Inspectorate believed that the Ministry of Construction’s legal basis for developing the enterprise’s equitization plan, which was the Government’s Decree 187 of 2004, was inappropriate. Additionally, Decision 1094, issued by the Ministry of Construction, approved the enterprise’s equitization value based on the Finance and Planning Department’s verification of the enterprise’s value determination, without the equitization steering committee’s verification, which was inappropriate.
The Ministry of Construction’s Decision 687 of 2016, which approved the state capital value at the time of 0:00 on March 13, 2008, for the handover of the state-owned enterprise, the Investment and Development Construction Company, to the Joint-Stock Investment and Development Construction Company, was not issued within the timeframe as prescribed.
Regarding the procedure for capital withdrawal and the determination of share value for state capital withdrawal, the Inspectorate stated that the Ministry of Construction issued a document approving the plan for state capital withdrawal from DIC Corp. in November 2017 without seeking opinions from the Ministry of Finance and the Ministry of Planning and Investment, which was inappropriate.
According to the inspection conclusion, the consulting unit, VIVACO Joint Stock Company, incorrectly determined the capital rate and the original value of two construction works on the land, leading to an asset value assessment lower than the regulations, with a difference of more than VND 2.4 billion. In determining the value of the asset, which is the right to use the land, VIVACO did not re-determine the value of 25 villas in the Phuong Nam Villa area, which was inappropriate.
“VIVACO and the Ministry of Construction did not re-determine the value of the right to use the land of the Dai Phuoc eco-tourism urban area project but used the accumulated investment costs and the project development rights value to calculate the value of the equitized enterprise, which was inappropriate,” the conclusion stated.
Dai Phuoc eco-tourism urban area of DIC Corp.
Regarding financial settlement in the period from the determination of the enterprise’s value to the official transition to a joint-stock company, according to the Inspectorate, during the settlement of the state capital value, DIC Corp. accounted for the losses of three subsidiary companies, which was approved by the Ministry of Construction and settled into the state capital value at 0:00 on March 13, 2008, for transfer to the joint-stock company, which was inappropriate.
The Inspectorate recommended that the Ministry of Construction and the state capital representative at the Joint-Stock Investment and Development Construction Company clarify the reasons and responsibilities for these losses and handle them according to regulations.
Regarding the issuance of private placement shares, the Ministry of Construction, as the owner, has not fulfilled its responsibilities in directing the private placement share offering price in 2009 and needs to be inspected and handled according to regulations.
The consulting unit’s price appraisal results and the historical transaction prices of the DIG stock on the stock market, which were referenced by the Ministry of Construction, formed the basis for the Ministry’s determination of a minimum offering price of VND 15,000 per share, which was higher than the consulting unit’s appraisal price (VND 12,430); the actual transaction price on the stock exchange was VND 19,250 per share, higher than the price determined by the Ministry of Construction.
The Inspectorate determined that the above violations were the responsibility of the leadership of the Ministry of Construction during the 2007-2009 and 2016-2017 periods and the Steering Committee for the equitization of DIC Corp.
The Inspectorate recommended that the Prime Minister direct the Ministry of Construction to organize an inspection to identify the forms of discipline for related organizations and individuals regarding the limitations and violations found during the inspection. They also recommended urging individuals and organizations to rectify the violated amounts, clarifying the direction of the private placement share offering price in 2009, and re-determining the value of the asset, which is the right to use the land of the Dai Phuoc eco-tourism urban area project.
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