A former general director of State-run MobiFone Telecommunications Corporation has been arrested for allegedly committing serious violations in a now-cancelled deal in which the mobile carrier had illegally acquired a 95% stake in private pay TV firm AVG.

Cao Duy Hai (L), former general director, and Pham Thi Phuong Anh, incumbent deputy general director, of State-owned telco giant MobiFone – PHOTO: MINISTRY OF PUBLIC SECURITY

The Ministry of Public Security said in a statement today that following the instructions of the Central Steering Committee for Anti-Corruption and its own leaders, the Investigative Police Agency is expanding its investigation into a criminal case involving MobiFone, a corporation under the Ministry of Information and Communications (MIC), and related organizations.

Based on the findings of further investigations as well as new evidence, the agency on Monday decided to prosecute former MobiFone chief Cao Duy Hai, 57, on charges of suspected violations of regulations on the management and use of public capital resulting in serious consequences, in accordance with the 2015 Penal Code.

Pham Thi Phuong Anh, incumbent deputy general director at MobiFone, faced similar charges as her former boss. The duo is now being held in police custody.

The Central Inspection Commission noted in a statement this June that the former MobiFone boss had committed serious violations regarding the infamous acquisition.

He had personally advised the MobiFone member council to submit a draft decision to the MIC on approval of the stake acquisition and had signed many related documents in violation of prevailing regulations to present a deal that caused significant losses for the State.

MobiFone, the country’s third-largest telco, had made headlines early in 2016 when it announced it was breaking into the pay TV market with the acquisition of the controlling stake in AVG.

In March this year, the Government Inspectorate concluded that the deal, which had not been approved by the prime minister, had violated investment laws and caused an estimated loss of some VND7 trillion (over US$300 million), including AVG’s liabilities of VND1.13 trillion, for the State budget.

The watchdog also found that MobiFone had provided false and incomplete information and had falsified AVG’s financial status in its report to the MIC on the deal, which resulted in MobiFone paying VND8.89 trillion for the stake which is said to have far blown out of proportion.

The acquisition led to MobiFone’s poor performance from 2016 onward, with profits that year falling by VND321.7 billion against the previous year. As of late 2017, its accumulated losses amounted to more than VND1.98 trillion, which adversely affected its plan to go public.

MobiFone and AVG called off the controversial deal in March this year, with AVG making a full refund. By May, AVG’s shareholders had returned more than VND8.5 trillion to MobiFone to reclaim the majority stake.

In July, police arrested a former chairman of MobiFone and a senior official of the MIC accused of involvement in the case. The then-Minister of Information and Communications Truong Minh Tuan was suspended that month and replaced in October over alleged ties to wrongdoing at the corporation.

According to the Ministry of Public Security, its investigators are now extending great efforts to speed up the investigation so that the violators can be strictly handled in line with the law.

SGT