The Lam Dong provincial Department of Justice has requested notary practice organizations in the locality to provide information and temporarily stop transactions of real estate deals, factories and projects owned by the 11 individuals.

Prior to that, on May 23, the investigation agency (C03) issued a decision to prosecute nine defendants in a criminal case involving VRG, Dong Nai Rubber Company, Ba Ria Rubber Company and related units, for breaches at the land plot on 39-39B Ben Van Don street in ward 12, district 4, in HCM City.

After the contributed capital transfer, the state owned enterprise (SOE) with 6,000 sq m of well-located land, right in the central area of HCM City, let the asset fall into private hands.

C03 issued decisions on prosecuting, arresting and conducting searches of nine defendants to investigate their behavior of "violating regulations on the management and use of state’s assets, causing loss and wastefulness".

The nine defendants include: Le Quang Thung, former general director and former acting chair of VRG board of directors; Huynh Trung Truc, former deputy general director of VRG; Pham Van Thanh, former head of VRG’s planning and investment division; Nguyen Thi Gai, former director of Dong Nai Rubber Company; Nguyen Cong Tai, former chair of Ba Ria Rubber Company’s board of members; Nguyen Trong Canh, former deputy director of Ba Ria Rubber Company; Le Y Linh, former director of Viet Tin Trade Co Ltd; and Dang Phuoc Dua, former chair of the board of directors of Viet Tin Trade and Investment JSC.

Nguyen Thanh Chau, former chair of the board of members of Dong Nai Rubber Company, has also been prosecuted on the charge, and is prohibited from leaving his place of residence.

On May 28, C03 released a decision on additionally prosecuting and arresting three other defendants in the same case, including Doan Ngoc Phuong, Deputy Director of the Department of Land Resources Planning and Development and Chairman of the Council for Asset Valuation in Criminal Procedures under the Ministry of Natural Resources and Environment (MONRE) and Khuong Thanh Tung, director of Thang Long Appraisal and Valuation JSC.

Public land turns into private land

The land plot at No 39-39B Ben Van Don street covers an area of 6,200 sq m. It is now a 33-storey apartment, office and service complex.

The land plot belonged to the state and was allocated to Dong Nai and Ba Ria Rubber Companies to manage. These are two subsidiaries under VRG.

In December 2009, the two rubber companies contributed capital to set up Phu Viet Tin Company Ltd, headquartered at No39-39B Ben Van Don with charter capital of VND6 billion. Dong Nai Rubber Company owned 72 percent of capital (VND4.32 billion), and Ba Ria Rubber 28 percent (VND1.68 billion).

In March 2010, the HCMC People’s Committee released a decision to take back the land plot and assign the land to Phu Viet Tin to develop a project.

The capital contribution structure witnessed big changes one year later with the appearance of Retro Harvest Finance Ltd from South Korea.

As of April 2010, the South Korean enterprise held 80 percent of Phu Viet Tin capital, worth VND4.8 billion. Meanwhile, the capital ownership ratios of Dong Nai Rubber and Ba Ria Rubber in Phu Viet Tin had dropped to 14.4 percent and 5.6 percent, respectively.

After being allocated the land plot at No 39-39B Ben Van Don, Phu Viet Tin did not implement the project. Meanwhile, the shareholder structure changed continuously. A new name turned up in 2014 – Quoc Cuong Gia Lai JSC.

In August 2014, Nguyen Thi Nhu Loan, CEO of Quoc Cuong Gia Lai, became the representative of the contributed capital of VND5,940,000,000 (99 percent) in Phu Viet Tin.

But just one month later, in September 2014, Quoc Cuong Gia Lai unexpectedly sold 0.5 percent of Phu Viet Tin’s capital to Lai Thi Hoang Yen at VND3 billion.

On September 10, 2014, Quoc Cuong Gia Lai bought another 1 percent of capital from Dong Nai Rubber (0.72 percent of total capital, worth VND43.2 million) and from Ba Ria Rubber (0.28 percent, VND16.8 million) to increase its ownership ratio to 99.5 percent.

After that, in mid-November 2014, Quoc Cuong Gia Lai sold 94 percent of Phu Viet Tin’s capital to two enterprises for VND800 billion. The remaining 5.5 percent of capital was transferred to Yen.

As such, in this case, Quoc Cuong Gia Lai made a profit of VND382 billion.

The government inspectors have found that Phu Viet Tin violated Decree 12/2009 as it did not set up an investment project. Meanwhile, HCM City People’s Committee did not observe the 2003 Land Law when taking land back and appointing Phu Viet Tin as the investor of the project on Ben Van Don.

Anh Phuong