Why do private investors want to take over Saigon Co-op?

With high revenue of tens of trillions of dong a year and an ROI (return on investment) of 30 percent, Saigon Co-op has drawn the interest of many investors.

HCM City inspectors have discovered signs of an attempt to acquire and appropriate capital and assets of Saigon Co-op after inspecting the observance of the laws at the retail chain, Dat Viet reported.

Why do private investors want to take over Saigon Co-op?

The revenue of Saigon Co-op in 2015-2019 (billion VND)



The biggest problem is the abnormality in rushing to increase charter capital in 2020 when a plan to increase capital had not been approved. Through member cooperatives, the managers of Saigon Co-op allowed investors to contribute capital to Saigon Co-op, causing the threat of Saigon Co-op being taken over.

The question is who is backing the takeover process and giving financial support to the cooperatives, which have not been performing well, by spending trillions of dong to acquire 50 percent of capital, thus indirectly obtaining the right to control Saigon Co-op.

Established in 1989, Saigon Co-op is managed by a union of HCM City cooperatives, with 26 member cooperatives.

In January, the first extraordinary general members’ meeting of Saigon Co-op was organized to discuss the solutions to increase capital from VND3.2 trillion to VND6.797 trillion. Twenty out of 26 member cooperatives agreed to contribute VND3.597 trillion, or 50 percent of capital.

The abnormal feature that inspectors found was that the cooperatives with high profits of VND5-6 billion did not contribute capital, while cooperatives with modest profit of tens of millions of dong agreed to contribute hundreds of billions of dong.

The abnormal feature that inspectors found was that the cooperatives with high profits of VND5-6 billion did not contribute capital, while cooperatives with modest profit of tens of millions of dong agreed to contribute hundreds of billions of dong.

 


Linh Tay Cooperative, for example, with chartered capital of VND600 million and loss of VND49 billion, contributed VND952 billion.

Inspectors believe that the member cooperatives contributed capital with capital they sought from outside sources. In other words, private investors attempted to contribute capital to Saigon Co-op through member cooperatives.

Meanwhile, member cooperatives could not provide documents related to the capital contribution and mobilization.

“If the sources of the capital for contribution cannot be clarified, Saigon Co-op will be controlled by institutions and individuals outside and it won’t be able to preserve the initial principles of operation,” inspectors warned.

Considered the No 1 retailer in Vietnam, Saigon Co-op holds 43 percent of the supermarket market share with sales four times higher than that of the second largest retailer.

In the hypermarket market segment, Saigon Co-op is the only Vietnamese retailer capable of competing equally with foreign giants (Big C, Lotte Mart and Aeon Mail).

The latest report showed that Saigon Co-op’s revenue is now 30,000 times higher than the revenue in 1989, when it was established.

The high return on equity of 26-39 percent has attracted individuals and institutions who want to control Saigon Co-op.

Translated by Kim Chi 

Hanoi retailers told to increase stocks threefold amid pandemic

Hanoi retailers told to increase stocks threefold amid pandemic

Retailers in Hanoi were told to increase stocks of essential goods by three-fold over average levels to ensure price stability amid the complex development of the COVID-19 pandemic.

Local retailers closing shops because of Covid-19

Local retailers closing shops because of Covid-19

Many retailers have had to close shops and give back retail premises to landlords because of poor patronage and a dramatic drop in sales.

 
 

Other News

.
Red boards with this phrase appear densely on Hanoi streets
Red boards with this phrase appear densely on Hanoi streets
BUSINESSicon  05/10/2021 

“Shop for rent”, “space for rent”, “house for rent”, … are the phrases that appear most on the streets of Hanoi after two months of social distancing.

Ministry forecasts Vietnam’s GDP growth this year at 3%-3.5%
Ministry forecasts Vietnam’s GDP growth this year at 3%-3.5%
BUSINESSicon  05/10/2021 

The Ministry of Planning and Investment has projected the country’s gross domestic product (GDP) growth in 2021 at 3%-3.5%, down 0.5 percentage points from the rate forecast in September.

Businesses reopen in HCM City, but challenges remain
Businesses reopen in HCM City, but challenges remain
BUSINESSicon  05/10/2021 

After months of social distancing the reopening of the HCM City economy on October 1 has brought cheer to both businesses and the public.

VIETNAM BUSINESS NEWS OCTOBER 5
VIETNAM BUSINESS NEWS OCTOBER 5
BUSINESSicon  05/10/2021 

 Project aims to enhance trade remedy capacity as Vietnam joins new-generation FTAs

Hanoi removes 28 administrative procedures in investment
Hanoi removes 28 administrative procedures in investment
BUSINESSicon  05/10/2021 

Hanoi’s authorities have decided to remove 28 administrative procedures in the field of investment.

VIETNAM BUSINESS NEWS OCTOBER 4
VIETNAM BUSINESS NEWS OCTOBER 4
BUSINESSicon  04/10/2021 

Vietnam develops rural tourism through digital transformation

Construction ministry proposes legal amendment to prevent 'land fever'
Construction ministry proposes legal amendment to prevent 'land fever'
BUSINESSicon  05/10/2021 

Many real estate brokers lack professional knowledge and ethics and do ‘hit and run’ business, causing losses to customers by giving wrong advice or even cornering the market and causing artificial land fever.

Vietnam warned of serious air pollution in motorization period
Vietnam warned of serious air pollution in motorization period
FEATUREicon  05/10/2021 

Vietnam is about to enter the motorization period when the market will boom and the air will become polluted. Policies on restricting the use of old-technology vehicles and encouraging green, clean vehicles are needed.

Focus turns to stamping out hotbeds, greening the economy
Focus turns to stamping out hotbeds, greening the economy
FEATUREicon  05/10/2021 

The acceleration of vaccinations will help restore production and business activities, and expand green production zones and a green workforce for the economy.

Quality workforce – “bottleneck” of support industry firms
Quality workforce – “bottleneck” of support industry firms
BUSINESSicon  04/10/2021 

The shortage of high-quality workforce is a “bottleneck” faced by domestic support industry enterprises, said economists.

As migrant workers leave cities, who will save businesses?
As migrant workers leave cities, who will save businesses?
FEATUREicon  04/10/2021 

Thousands of migrant laborers have returned to their hometowns to avoid the pandemic, leaving behind city dreams. The consequence is that enterprises lack workers to restore production in the "new normal".

Basa fish industry in the Mekong Delta hit hard by social distancing
Basa fish industry in the Mekong Delta hit hard by social distancing
BUSINESSicon  04/10/2021 

As of mid-September, basa harvesting is estimated at 932,000 tonnes, only 81.1 per cent of the same period last year.

Vietnamese manufacturing hit by pandemic
Vietnamese manufacturing hit by pandemic
BUSINESSicon  04/10/2021 

The Vietnam Manufacturing Purchasing Managers' Index (PMI) remained at 40.2 in September.

HCM City businesses propose support policies
HCM City businesses propose support policies
BUSINESSicon  04/10/2021 

Businesses in HCM City have called for support policies to help them revive operations after disruption caused by the COVID-19 pandemic.

Vietnamese ICT businesses benefit from digital consumption
Vietnamese ICT businesses benefit from digital consumption
BUSINESSicon  04/10/2021 

Vietnamese ICT enterprises have benefited greatly from the fast digitalisation trend, with their revenues rising despite the COVID-19 pandemic.

Vietnam’s economy to slow as population ages: WB report
Vietnam’s economy to slow as population ages: WB report
BUSINESSicon  04/10/2021 

Population aging could slow down Vietnam's long-term growth in the 2020–2050 period by 0.9 percentage points compared with the last 15 years, a new World Bank (WB) report finds.

Millions of US dollars poured into green growth projects
Millions of US dollars poured into green growth projects
BUSINESSicon  03/10/2021 

Capital flows into green growth projects have still seen positive signals despite adverse impacts from the COVID-19 pandemic on foreign direct investment (FDI) in Vietnam.

Vietnam likely to attain trade surplus in 2021
Vietnam likely to attain trade surplus in 2021
BUSINESSicon  03/10/2021 

Vietnam is in a favorable condition to take advantage of free trade agreements (FTA) that the country is a part of, as well as growing global demand in the late-year shopping season.

Private sector plays key role in post-pandemic recovery
Private sector plays key role in post-pandemic recovery
FEATUREicon  03/10/2021 

Vietnam's emerging and dynamic private sector proved its resilience during the Covid-19 pandemic as it helped the country become one of the few countries to obtain positive growth in 2020. 

No price hike on power bill until the end of the year: MoIT
No price hike on power bill until the end of the year: MoIT
BUSINESSicon  02/10/2021 

There will be no increase in electricity prices from now until the end of the year, the Ministry of Industry and Trade (MoIT) - the country's power regulator - announced yesterday during the ministry's monthly press conference.

 
 
 
Leave your comment on an article

OR QUICK LOGIN