On October 29, the Ho Chi Minh City People’s Court held a first-instance trial for a case involving violations of regulations on the management and use of state assets, leading to losses and waste. The case centers around the use of land at 151-155 Ben Van Don, Khanh Hoi Ward, Ho Chi Minh City.
The Ho Chi Minh City People’s Court in session on October 29
According to the indictment, the 151-155 Ben Van Don plot (over 7,000 sqm) was originally under the management of the Vietnam Tobacco Corporation, directly used by the Saigon Tobacco Factory. In 2005, Thanh Nien Newspaper submitted a document to the Ho Chi Minh City People’s Committee requesting to purchase this land to build a new editorial office.
A $65 Billion Deal at the Prime Ben Van Don Land
Mr. Nguyen Cong Khe at the court
After multiple exchanges between central and local authorities, on February 9, 2006, the Government Office issued Document No. 635/VPCP-CN, announcing the Prime Minister’s approval in principle for Thanh Nien Newspaper to purchase and acquire land use rights at the aforementioned location.
Based on this, the Ho Chi Minh City People’s Committee instructed the Department of Finance to coordinate with relevant departments to determine the selling price. The Ministry of Finance later provided guidelines for the designated sale, stating that the Vietnam Tobacco Corporation must hire an appraisal organization to determine the market price.
On December 28, 2007, Thanh Nien Newspaper and Saigon Tobacco Company signed a principle contract (No. 01-08/HĐNT-TLSGBTN) for the transfer of land use rights and the sale of attached assets, totaling 65 billion VND (provisionally calculated at 50% of the appraisal value by the Southern Information and Price Appraisal Center). This transaction was conducted through a designated sale, without an auction, with the purpose of building Thanh Nien Newspaper’s editorial office.
After gaining management rights to the land, Thanh Nien Newspaper did not proceed with the construction of the editorial office as initially planned but shifted to a joint venture for a commercial project.
In January 2008, Mr. Nguyen Cong Khe, then Editor-in-Chief, signed a loan agreement with Vinpearl Company, using the Ben Van Don land as collateral, despite not yet having a land use certificate.
Mr. Khe also signed a cooperation agreement with other companies to establish Thanh Nien Real Estate JSC, aiming to develop the Thanh Nien Plaza project, which included offices, a shopping center, and apartments. However, this project had not been approved by the Prime Minister and the Ho Chi Minh City People’s Committee for land use purpose adjustments.
When reporting to the governing body, Thanh Nien Newspaper stated it held 70% of the new company’s charter capital, while in reality, it only owned 43%. This misreporting led the Ho Chi Minh City People’s Committee to send incorrect information to the Prime Minister, resulting in the company being approved as the project investor contrary to regulations.
According to records, Thanh Nien Newspaper did not use land use rights as capital contribution but used funds borrowed from third parties. In May 2008, the company was granted an operating license, but Thanh Nien Newspaper only fully contributed capital two years later, using funds borrowed from Sun Group JSC. The total borrowed capital reached 368 billion VND, far exceeding the owner’s equity of only 282.8 billion VND.
By 2010, Thanh Nien Newspaper divested 28% of its equity but did not conduct a public auction or re-evaluate the market value of the shares, resulting in a loss of over 9.5 billion VND. In 2014, during another divestment, Thanh Nien Newspaper maintained the starting price at 10,100 VND per share, while the actual value was appraised 1.5 times higher, causing further losses to state assets.
Abandoning Ownership of Assets Worth Over 300 Billion VND
On July 22, 2014, Mr. Khe and Mr. Nguyen Quang Thong (his successor) signed a termination agreement for the investment cooperation between Thanh Nien Newspaper and Thanh Nien Media JSC. In this agreement, Thanh Nien Newspaper voluntarily relinquished ownership of 9,000 sqm of constructed floor area in the high-rise project, which was legally entitled to the newspaper.
According to the Ho Chi Minh City Price Appraisal Council, this area was valued at over 307 billion VND. The relinquishment was deemed unauthorized, without a resolution from the governing body and without permission from the Prime Minister. This act resulted in a state loss of over 205.7 billion VND, with Thanh Nien Newspaper directly losing 82.8 billion VND through its equity in Thanh Nien Media JSC.
Investigators determined the total loss in the case to be over 215.2 billion VND, including: 205.7 billion VND from the relinquishment of 9,000 sqm of floor area; and 9.5 billion VND due to incorrect land use value determination.
The Ho Chi Minh City People’s Procuracy charged Mr. Khe as the mastermind and instigator, and Mr. Thong as an active accomplice, jointly executing and legitimizing the violations.
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