Businesspeople have called on the government to take measures to control foreign capital and prevent foreign investors from acquiring local strong brands and Vietnamese enterprises in important business fields.
Stark Corporation from Thailand has paid $240 million to acquire Thipha Cables, an electric wire and cable company, and Dovina, a non-ferrous metal and plastic company.
Also from Thailand, Super Energy Corporation has sent a document to the State Securities Commission (SSC) with a decision to invest $456.7 million in four solar power plants in Vietnam, including Loc Ninh 1, Loc Ninh 2, Loc Ninh 3 and Loc Ninh 4 in Binh Phuoc province.
Most recently, a group of foreign shareholders from Kustocem Pte, which is holding 18.23 percent of Coteccons’ shares (CTD), reasoning the sharp fall of CTD price and the lack of transparency in accounting, has joined forces with other big shareholders to gather an extraordinary shareholders’ meeting with an aim to change the key personnel of Coteccons.
Coteccons’ CEO Nguyen Sy Cong believes that foreign shareholders are taking the move just to swallow Coteccons, the leading contractor in Vietnam.
|Businesspeople have called on the government to take measures to control foreign capital and prevent foreign "sharks" from swallowing local strong brands and Vietnamese enterprises in important business fields.|
He said since Kustocem became a big shareholder of Coteccons in 2012,it has not made any direct contribution to the company’s production and business.
The members of the board of management representing Kustocem rarely attend meetings, but authorized individuals in Vietna do this. The group of investors many times has vetoed the decisions at shareholders’ meeting.
“We hope appropriate agencies will take necessary actions to protect the Coteccons brand, a Vietnamese brand, as well as the benefits of all shareholders, and the jobs of 30,000 workers and their families,” Cong said.
Cong’s concern about hostile takeover is reasonable. Kustocem requested an extraordinary shareholders’ meeting in mid-October 2019 to discuss the dismissal of President Tran Ba Duong and CEO Nguyen Sy Cong.
The risk of Vietnamese enterprises being swallowed after suffering from Covid-19 has been warned by the Ministry of Planning and Investment (MPI).
The ministry, in a report about possible impacts of the epidemic on the economy, predicted that there would be more M&A deals and warned that many Vietnamese enterprises would fall into foreign hands.
The Vietnam Chamber of Commerce and Industry (VCCI) also thinks this is a high risk and even asked to temporarily stop M&As during Covid-19 in order to protect Vietnamese enterprises and brands.
Meanwhile, Pham Duy Khuong, director of ASL Law, believes that the state should pay attention only to the most sensitive business fields of the economy to avoid adverse impact on the economic security, and should not make interventions into other businesses.
He warned that if Vietnam imposes overly strict control, this will affect the investment environment in the long term.
Vietnamese businesses reeling under financial stress due to the COVID-19 pandemic have become vulnerable to foreign takeovers and need the Government's support, according to experts.
Businesses are expecting interest rates to continue to fall, while banks’ credit growth continues to stand still or declines because of low credit demand.