VietNamNet Bridge - The State Capital Investment Corporation (SCIC), representing the State, a major shareholder in Vinamilk, and the SCIC board of directors, representing shareholders, are in a behind-the-scenes battle for the right to manage Vinamilk, the country’s biggest dairy production company.

 

 

At the shareholders’ meeting held some days ago, information about market share, advertising budget, merger & acquisition plans and investment projects were not the priority of Vinamilk’s shareholders.

Their main interest is in the underground fight for the power to manage the company.

SCIC, a big shareholder with a 40 percent stake, proposed to appoint one more independent member for the board of directors and to amend the company’s regulations. However, the proposals were rejected. 

One shareholder said he did not agree to have more independent members for the board of directors.

In the past, SCIC nominated Ha Van Tham, former chair of Ocean Bank, as the independent member. The proposal was accepted, but later Tham resigned from the post.

“It was lucky that Tham resigned from the post. I could not imagine what the investors would have done with Vinamilk’s shares if Tham was working as a member of Vinamilk’s board of directors when he was arrested,” he said.

Ha Van Tham was arrested in late 2014 for the wrongdoings he committed with Ocean Bank.

Sources said that SCIC invited the representatives of several foreign institutional investors who hold a high proportion of Vinamilk’s shares to a meeting in Hanoi a few weeks before the shareholders’ meeting took place.

Foreign investors hold 49 percent of shares in total. They have a decisive voice in the company’s decisions.

Another SCIC proposal was rejected at the shareholders’ meeting. Members of the board of directors and supervisory board would have automatically lost their membership status if they no longer represented institutional investors.

The proposal, as explained by an investment fund, relates to Mai Kieu Lien, now chair of the board of directors and CEO of Vinamilk.

Lien now represents the state’s capital in Vinamilk, which is being managed by SCIC. Lien will retire next year at the age of 55, and therefore, will no longer be the representative of the state’s capital in Vinamilk. If this occurs, Lien would automatically be no longer a member of the board of directors.

However, the proposal was not accepted by Vinamilk’s shareholders, who realized that the board of directors fulfilled its task well to develop Vinamilk into a powerful business over the last decade.

Vinamilk reported total revenue of VND35.7 trillion in 2014 and post-tax profit of VND6.068 trillion.

TBKTSG