VietNamNet Bridge - Problems faced by some foreign direct investment (FDI) projects have placed Vietnam in a vulnerable position, but authorities are finding it difficult to revoke the projects’ licenses.

GMIE, a 100 percent South Korean invested enterprise in Que Vo Industrial Zone in Bac Ninh province, unexpectedly laid off workers for an indefinite time, while its general director reportedly fled to South Korea in June 2015. 

The news stirred up the public. No one can explain why GMIE had to shut down because it had been making profits since it began operation in Vietnam.

The Bac Ninh provincial Industrial Zone Management Board released a notice that Yu Kiun, the GMIE’s general director, must meet the management board no later than June 18. However, the general director did not turn up.

Bui Hoang Mai, deputy head of the Bac Ninh Industrial Zone Management Board, told Dat Viet on July 15 that GMIE’s general director authorized Hanjin, a South Korean invested enterprise in Yen Phong Industrial Zone, to follow necessary procedures to dissolve GMIE.

Do Nhat Hoang, head of the Foreign Investment Agency, when asked about escaped FDI businesses, said the agency has no information about this.

“In general, local authorities do not report to us about this. They only report the number of registered projects and the disbursement,” Hoang said.

“The number of escaped FDI enterprises is not considered by the Ministry of Planning and Investment periodically, monthly or quarterly,” he explained. 

The problem is only mentioned when the ministry conducts specific investigation campaigns. 

Tuoi Tre quoted the Ministry of Public Security as reporting that 890 FDI enterprises with the total registered capital of $900 million have left.

The ministry’s report also pointed out that about 2,600 foreign invested enterprises have borrowed VND21 trillion worth of capital from domestic credit institutions, of which VND1.9 trillion have become bad debts.

In principle, local authorities will revoke the licenses granted before to foreign invested enterprises if the investors cannot implement the projects as promised. However, in fact, it is difficult to do this.

Dau Tu quoted the $1.6 billion Bai Dai Resort project registered by Starbay Holdings as an example. 

The project has not begun since the day the investor got the investment license seven years ago.

The Binh Dinh provincial authorities have been urged to revoke the license granted to the $250 million Vinh Hoi tourism complex project which has not been implemented since 2007.

However, sources said the local authorities can only take back the investment license, and cannot eliminate the project (including the land), because the authorities have only allocated 135 hectares of the 235 hectares of land it promised to the investor.

Dat Viet