VietNamNet Bridge – The number of foreign-invested enterprises (FIEs) whose owners have fled is growing, but it is not easy for the authorities to handle such cases.

In Dong Nai, Binh Duong and HCMC, the fact that owners of operational FIEs run away is not something new. What matters is that the number of such cases has been surging over the years, causing tax revenue losses and leading to consequences for their employees and partners.

For example, in Binh Duong, the provincial Department of Planning and Investment recently discovered that the owner of the South Korea-invested company Ado Vina, specializing in making bags and apparels, had fled from his workshop in Thuan An, leaving a wage debt of some VND245 million.

Ado Vina is only a small-sized enterprise and has to rent a workshop and machines from a domestic firm, so the fleeing business owner has not left any property behind. The proprietor not only cannot collect rent, but also has to pay telephone and electricity bills for Ado.

Le Viet Dung, deputy director of the department, said Binh Duong had recorded 16 cases of FIE owners taking flight since 2009, leaving a huge debt to their workers and the State.

The number of FIEs with fleeing owners in HCMC is also considerable. According to the HCMC Export Processing and Industrial Zones Authority (Hepza), there are 24 foreign-invested projects in the city-based export processing zones (EPZs) and industrial parks (IPs) that Hepza cannot contact their owners.

This figure does not include the FIEs operating outside EPZs and IPs, which are managed by the municipal Department of Planning and Investment. The department is reviewing all the projects whose owners have taken flight or are currently absent.

Dong Nai Province also records many cases of fleeing FIE owners. Bo Ngoc Thu, director of the provincial Department of Planning and Investment, said the majority of enterprises whose owners had run away were small-sized, and thus there was not any great change in the labor force.

The aforesaid projects share a common theme in that their owners have fled to their home countries without going through dissolution procedures and leaving a massive debt to banks, tax offices, employees and local partners.

The fact that owners of operational FIEs get away spells much trouble for the State management agencies. They have difficulty getting investors to follow dissolution procedures and handling mortgaged assets including factories, machines, equipment and production lines attached to leased land.

Meanwhile, the projects whose owners are absent have not gone through the procedures for liquidation and dissolution and their certificates have not been revoked, so other projects cannot get certificates for development at the same location.

This situation causes a waste of land, brings losses to IP infrastructure companies and makes it difficult for banks to sell mortgaged assets.

In the first 11 months of 2012, the Dong Nai Industrial Zone Authority revoked investment certificates of 17 small and medium-scale projects that the province has been out of touch with their owners for a long time. However, it is very difficult to handle such cases due to the lack of regulations, said Thu.

Therefore, Dong Nai’s government has asked the Ministry of Planning and Investment for instruction.

Recently, the ministry released Document 7566/BKHDT-PC with guidelines for revoking investment certificates of projects with absent owners that haven’t started or have received court judgments. However, there is no guideline for the other cases.

Hepza describes it as a difficult problem to handle the projects that have realized whole or part of their registered capital. Hepza finds it hard to cancel the projects whose debts remain unsettled.

Source: SGT