A petrol station of Oil & gas conglomerate Petrolimex. Petrolimex will identify and deal strictly with collective and individual responsibilities for loss-making investment decisions and other business management errors, a senior official said yesterday. 

In this regard, the group will follow to the letter recommendations made by the Government Inspectorate, Deputy General Director Tran Ngoc Nam of Petrolimex told the Vietnam News Agency.

Nam's statement followed the publication of an online notice on Monday by Deputy Inspector General Ngo Van Khanh.

The notice said Petrolimex had poured nearly VND2.26 trillion (US$100.44 million) into non-core businesses between January 2010 and June 2013.

The group invested VND400 billion in the PG Bank, VND171.36 billion in Petrolimex Insurance JSC, and VND51 billion in Petrolimex Land JSC (now known as Petroleum Logistic Service and Investment JSC) without approval from the Prime Minister and the Ministry of Industry and Trade (MoIT).

The notice said Petrolimex investments of nearly VND232 billion in the banking, insurance and real estate sectors were not stated in the group's management board resolutions.

The group authorised affiliates to invest in construction works worth VND414.66 billion using capital appropriated for making payments.

It also failed to "seriously" divest from non-core businesses as ordered by the Government.

Apart from these mistakes, several Petrolimex investments had proved inefficient, the notice said.

About VND178.50 billion invested in Petrolimex Aviation Fuel JSC and Petrolimex Land JSC, and VND38.81 billion in Tuyen Quang Trading JSC, PTN Chemical Co Ltd and Van Phong Investment & Development JSC had failed to generate due returns.

The Viet Nam Petroleum Transport JSC (Vipco), a Petrolimex affiliate, risked losing its investment of VND56.16 billion in An Phu JSC, the notice said.

Serious violations

The notice highlighted several "serious violations" at Vipco.

In April 2008, Vipco transferred VND72.54 billion into a joint bank account it opened with Thien Loc Phu Trading – Services – Production Co Ltd. The transfer was made after Vipco general director Nguyen Dao Thinh inked co-operation contracts with the company.

Vipco allowed Thien Loc Phu to withdraw VND20.18 billion from the account, but this was not used to fulfill contract obligations. Thien Loc Phu has refunded just VND1.5 billion to Vipco, and VND18.68 billion remains irrecoverable.

Also in April 2008, former general director Nguyen Dao Thinh and former chief accountant Vu Quang Khanh of Vipco transferred VND483 million into an account of Nguyen Thi My Dung, a Thien Loc Phu official. They have not been able to reclaim this amount.

Dung and Thien Loc Phu director Pham Ngoc Son are also implicated in an irrecoverable sum of VND19.16 billion resulting from "violations of finance management principles and irresponsible actions causing serious consequences," the notice said.

Wrong calculations

It said Petrolimex had wrongly estimated petroleum consumption volumes, resulting in a VND4.90 billion deficiency in the statutory price stabilisation funds.

The group also invested in 178 construction projects worth VND11.86 trillion, and 29 of these were showing tardy progress while many others suffered shortcomings related to tender and site clearance processes.

The inspectorate suggested that the MoIT directs Petrolimex to review collective and individual responsibilities and deal with them accordingly.

It said Petrolimex and member companies should withdraw capital from non-core businesses and take steps to recover misappropriated funds.

It also asked the Ministry of Public Security to investigate the nexus between Vipco and Thien Loc Phu companies, and initiate legal proceedings against errant officials.

The inspectorate notice said Petrolimex and member companies contributed about VND85.27 trillion to the State budget and created 17,000 jobs in 2010-13.

Petrolimex and its affiliates have reported total revenues of VND52.72 trillion in the first half of this year, a year-on-year decline of 27 per cent because of falling global crude prices.

However, their combined pre-tax profits reached VND2.80 trillion in the first half of 2016, 148 per cent of that of the corresponding figure in 2015.

As of June, Petrolimex had VND21.95 trillion in equity, up 35 per cent over the beginning of the year. 

VNS