VinaCapital, one of Vietnam's largest asset management companies and a shareholder of Hoa Sen Group, opposed the latter’s decision to carry out the $10.6 billion steel complex in the central province of Ninh Thuan due to concerns over environmental pollution, according to newswire Tuoitre.

VinaCapital’s stance was announced by managing director Nguyen Hoai Thu on October 13, at its annual investor conference in Ho Chi Minh City.

Thu said that VinaCapital posed a series of questions regarding environmental and operating expenditures to Hoa Sen and that it will not support the project’s construction unless Hoa Sen proves that it has effective and sustainable environmental protection measures.

“Most shareholders support any project that may yield profit, but if matters relating to the environment and sustainable development are involved, we have to reconsider our investment decisions. We still suspect the environmental safety of the project,” Thu stated.

“The project is awaiting approval. If Hoa Sen decides to go ahead with the project without proof of satisfactory environmental protection measures, VinaCapital will reconsider holding our shares in the company,” Thu added.

Through its subsidiary VCG Partners Vietnam Fund, VinaCapital currently holds a 0.5 per cent stake in Hoa Sen.

Earlier in August, the Ninh Thuan People’s Committee allowed Hoa Sen to carry out surveys and study plans to construct the infrastructure of Ca Na industrial park and the related steel manufacturing and seaport complex in Thuan Nam district. 

Eight years ago, the project was invested by Vinashin-Lion Joint Venture Company Limited, a joint venture of state-owned Vietnam Shipbuilding Industry Group (Vinashin) and Malaysian Lion Group, with athe total investment capital of $9.8 billion. However, the province revoked the project’s investment certificate due to long delays.

The project has raised concerns about a risk of environmental pollution after the environmental breakdown caused by the $10.5 billion steel and port complex operated by Hung Nghiep Formosa Ha Tinh Steel Co., Ltd. The breakdown caused the massive wave of fish death in the four central coastal provinces of Ha Tinh, Quang Tri, Quang Binh, and Thua Thien-Hue in April this year.

However, responding to these concerns, Hoa Sen chairman Le Phuoc Vu confirmed that the plant will not discharge wastewater into the sea. In case the plant causes environmental pollution, Hoa Sen will close the facility with immediate effect and hand over all of the plant’s assets to the state.

VIR