VIETNAM CHAMBER OF COMMERCE AND INDUSTRY
Liên Đoàn Thương Mại Và Công Nghiệp Việt Nam
I/ The first issue: About land
The company received a project transfer under the evaluation and permission of Lao Cai People's Committee at the Decision 2400 / QD-UBND dated August 25, 2014 of the Chairman of Lao Cai Provincial People's Committee; being granted a land use right certificate for 21.2 hectares, there was a written record confirming the status of no dispute of the departments and localities before the Provincial People's Committee issued a decision to lease land, signed a land lease contract ...
From the records of legal procedures appraised and verified by Lao Cai Province. The company signed a transfer contract with a transfer value of VND 63.8 billion, in which the value of infrastructure and equipment was VND 14 billion, the rest was the value of land and the right to inherit project.
However, until the present time, the company can only use the area of 5.6 hectares of land, the remaining area was in dispute with 13 households (in which 04/13 households had red books issued superimposing the red book of the company) although the unit got a lot of documents asking for Lao Cai Provincial People's Committee and other departments to settle and return the premises to the enterprise for investment, but so far the province did not deal withthis yet.
II/ The second problem: Damage as a result of documents, bureaucratic, volunteristlacking of transparency and imposingdecisions as well as manifesting group benefits.
1) For the Decision No. 711 / QD-UBND dated March 7, 2018 on the suspension of the Indefinite Lao Cai Color Metallurgy Plant.
This was an unannounced decision, without no suspending period, after the complaination of thecompany, the Provincial People’s Committee revoked this Decision and after 3 months of suspension, the factory was paralyzed, the total damage reached hundreds of billions, preliminarily more than 30 units suffered damage, most of them were major partners in the country and foreign corporations because the Company had no source of payment, payment of goods and loan. Interest loan in specific bank was as follows:
• The CLIVEDEN AG Group Switzerland: 4.3 million USD (VND 100 billion),
• The TRAFIGURA Singarpo Group: 3.0 million USD (VND 70 billion),
• The Hoa Van International Group of China advanced the contract to install EPC general contractor: USD 13.2 million (VND 300 billion).
These corporations were contacting and through diplomatic channels to submit meeting the Government’s Prime Minister, the Party and State leaders to ask for intervention because they think they are deceived and at risk due to being misleaded, ineffective management of the locality, this would certainly adversely affect the business and investment environment in Vietnam as well as Lao Cai Province in particular.
• Debt / cash unpaid for Chinese trade: The Tan Hiep Hoa Company VND 66.0 billion, the Dam Thuy Thanh Company: VND 48.0 billion, the Than Thang Ha KhauVND 45.0 billion, the Dich Mon Company: VND 30 billion. Total was VND180 billion.
These companies sent documents to the Lao Cai Customs Department, the Lao Cai Provincial People's Committee and proposed to intervene requestingthe Tu Dinh Company to pay goods; they were going through the Vietnamese Consulate in Kunming-China, the Chinese Embassy in Vietnam to send a diplomatic note to the Government of Vietnam asking for assistance in settling money / goods recovery and sanctioning of contract violations .
- The SHB Lao Cai Bank Branch: VND 335.0 billion,
- The HDBank Lao Cai: 45.0 billion
While imported goods returned to Hai Phong port warehouse, the company did not have money to pay for partners and banks. Therefore, these two banks informed the company to request payment of loans, overdue interest and report on the direction of handling loans and open-ended loans for banks to recover capital.
• The total amount of transfer and investment in capital construction at Lao Cai color metallurgy factory was nearly VND 400 billion, currently the company cannot use it because the factory was suspended from production indefinitely and still had to pay daily loan interest, while equipment stoped working and became more and more degraded.
2) For Decision No. 1488 / QD-UBND dated May 18, 2018 on indefinitestopping production of Sten at Lao Cai Color Metallurgy Factory.
This was an incorrect and objective decision. Because of regulations regulating production and business activities of enterprises was recognized by the Law on Enterprises and the Law on Investment, in which the State allowed enterprises to do business in products, goods and services that were not prohibited by law. On the other hand, in the investment certificate, the company was allowed to produce copper items and according to the Circular No. 38/2015 / TT-BTC dated March 25, 2015 of the Ministry of Finance, the ore and concentrates import, processing and exporting companies were goods that were granted HS import and export codes,were not limited in quantity and not required to obtain permits from competent State agencies.
According to the non-production investment certificate, the factory was allowed to produce iron tablets. Responding to the call of the Government and Lao Cai Province on deep processing of minerals and the use of domestic raw materials, avoiding "bleeding" of national resources. Currently the factory had a production line of pellet iron with capacity of nearly 200,000 tons / year with nearly 100 regular employees, produced products and supplied to Viet Trung iron and steel factory as input material for Cast iron production, but Lao Cai Province still required to stop operation and cut off electricity. On the other hand, it was known that Lao Cai wrote documents to ask the Government to allow the province to export millions of tons of raw iron ore abroad? Was it for the benefit of certain individuals or groups? Or were there any individuals / organizations that intentionally restrain the business from going bankrupt ?.
To study and evaluate the situation. On April 21, 2018 and on June 4, 2018, the Government Inspectorate had 2 delegations to inspect and grasp the situation and worked with Lao Cai Provincial People's Committee. After that, the Government Inspectorate issued a Document No. 1042 / TTCP-CI dated July 3, 2018 to Lao Cai Provincial People's Committee for complaints, denunciations, feedbacks and recommendations of citizens in Lao Cai Province, in which, There was a section to support and solve difficulties for businesses to ensure stable production and business soon. However, Lao Cai Provincial People's Committee did not comply with the guidance and direction of the Government’s Prime Minister, and even did do opposite by directing documents to direct all departments, police (there was only a shortage of military mobilization) to consolidate the records to sanction administrative violations, proceeded to revoke investment projects, revoked certificates of land use rights, forced to demolish construction works ... obtruded enterprises to come the way to bankruptcy.
From the decisions on abuse of state power, bureaucracy, unreasonable, imposing and coercing enterprises unreasonably by Lao Cai Provincial People's Committee led to consequences for the company as follows:
1) The business was severed by business partners and sued for payment of investments, money / goods very clear (there were already a few claim units). If the above risks were real, it was almost certain that the company was forced to declare bankruptcy, shareholders and business partners with us would lose all money / goods, invested assets, damaged up to trillion; even leaders, shareholders may have to get involved in the labor cycle.
2) Banks would sell assets and recover debts, the company had no longer opportunities to survive and develop. Currently, there were private units and domestic partners who gave strange social people to the company headquarters to raise their voice, threaten to ask for money, if the Company did not solve and pay off all debts, they would threaten to life of employees, family members, wives and children of the Company's managers.
3) The project was in danger of revocation of Investment Certificate, revocation of LURCs, dismantling works ... absurd even if the above documents were appraised by the Provincial People's Committee and other departments and inspected for enterprises legally.
4) The company was obliged to take legal action in an international court / arbitration court in Vietnam or foreign countries sued by foreign corporations that were sure that did not win and had no financial resources paidapplication because of losing.
5) When the company announced the decision to suspend, request to terminate the operation indefinitely, all shareholders and more than 100 employees of the Company were working at the factory very anxious, because they were main labor employees, they had no income to support the family without of jobs. Among them, more than 10 employees used their houses and assets as collateral with banks to bail out for the Company to borrow capital for production and business. Now, they were in danger of being unable to repay their debts. mortgage would be sold by banks, many people had no place to live, so they were very frustrated, pent up and were losing faith in the party and government; It could likely occur unexpected incidents.
III / Proposal of the Enterprise: From the two issues presented above, The Tu Dinh JSC would like to proposethe Lao Cai Provincial People's Committee to solve some of the following issues:
1 / Completely resolving land disputes, red books overlapped with red books at the Lao Cai color metallurgy plant Project, Ban Lau Commune, Muong Khuong District, Lao Cai Province.
2 / Compensation for financial losses of the temporarily calculated interest on loans, penalty for temporary contracts of VND 35.0 billion for enterprises and all other related losses temporarily calculated VND 180 billion, issued by the People's Committee Lao Cai Province imposed, useditspowers assigned by the State to abuse the right to issue the decision No. 711 / QD-UBND on March 7, 2018 in a lack of transparency and objectivity; After that, the company complainedto the Provincial People’s Committee and they had to revoke this decision by the Decision No. 1481 / QD-UBND dated May 18, 2018. The consequences of issuing the Decision No. 711 / QD-UBND made particularly serious losses on finance
3 / The Provincial People’s Committee worked directly with the partners of the Company, especially the banks of SHB, HDBank, CLIVEDEN TRADING AG Switzerland; the TRAFIGURA Singarpo Group, Hoa Van-China International, Zhongcheng Group - China, to explain their decisions and reassure them the roadmap to resolve and overcome the current situation forenterprises so as to partners, corporations, contractors could build peace of mind, trust and not to bring the case to the international jurisdiction.
