According to Nguoi Lao Dong, on 4th January, the Criminal Investigation Agency of the Ministry of Defense temporarily arrested Mr. Ngo Van Phang, former Chairman of the Board of Directors of Cadovimex Seafood Processing and Import-Export Corporation (CAD), on charges of fraudulently appropriating assets related to bank loans. He was brought to Can Tho City for further investigation. On the same day, the Criminal Investigation Agency of the Ministry of Defense also prosecuted two officials from a bank branch in Ca Mau. Previously, according to Cong An Nhan Dan, the Criminal Investigation Agency of the Ministry of Defense also prosecuted five individuals in connection with the “Fraudulent misappropriation of assets” case at Cadovimex.
Before the arrest of the company’s executives, Cadovimex went through a period of stagnation, continuous losses, and loss of solvency.
Debts of 1,397 billion VND
Cadovimex used to be one of the large seafood companies (established in 1985) with annual revenue reaching billions of Vietnamese Dong. However, due to various reasons such as difficult debt recovery, heavy debt burden, and difficulties in the export market, the company is in a downturn. In 2015, Cadovimex’s revenue dropped from 480 billion VND (in 2014) to 196 billion VND, with a post-tax profit of less than 0.4 billion VND.
From 2016 to 2023, the company suffered continuous losses, accumulating losses of 1,619 billion VND by the end of last year, and negative equity of 1,424 billion VND.
As of December 31, 2023, the company’s total assets were less than 14 billion VND, including cash of 728 million VND. The company had accounts receivable of 172 billion VND from customers, but had to set aside a 100% provision, mainly for customers in South China and Cadovusa.
The company’s workforce also collectively resigned. As of May 2023, Cadovimex had only 101 employees under labor contracts, with about 50 workers working on shifts. On the other hand, the warehouses, machinery, and equipment are old and seriously degraded.
According to Cadovimex’s management board, the business operation depends on borrowed capital. However, credit institutions have stopped lending since August 2015, causing the company to have no capital for purchasing raw materials and production. The company’s main revenue comes from rental services, export consignment, and subcontracting for other units in the same industry to maintain wage payments for workers. In addition, the company’s capital has been occupied by customers for many years without recovery, leading to several years of decline, despite many restructuring plans being proposed.
Bank losses of over 400 billion VND due to the completed bankruptcy procedures
At the 2023 Annual General Meeting of Shareholders, Cadovimex’s leadership planned to complete the legal procedures to initiate bankruptcy proceedings for the company while seeking new resources and potential investors to revive its business.
As of September 30, 2023, Cavodimex had to pay 967 billion VND, mainly in bank interest payments totaling over 921 billion VND. Notably, despite the suspension of lending since 2015, Cadovimex still owes 302 billion VND and 129 billion VND in VND and USD loans, respectively.
Banks with stuck capital in this seafood company include BIDV with 107.5 billion VND, Agribank with 128 billion VND, Vietcombank with over 39 billion VND… all of which have lost the ability to pay.
