The equitization and divestment process at DIC Corp has a series of violations.

The equitization process and procedures were not in accordance with regulations.

Accordingly, the Government Inspectorate 's conclusion clearly states that during the equitization and divestment process at the Investment and Development Construction Company (now the Investment and Development Construction Corporation - DIC Corp), limitations, shortcomings, and violations arose.

Specifically, regarding the legal basis and procedures for equitization, the Ministry of Construction's approval of the value of the equitized enterprise based on the results of the verification of the enterprise's valuation by the Planning Department is not in accordance with regulations.

These limitations, shortcomings, and violations resulted in some procedures not being implemented correctly according to the regulations of Government Decree 109/2007/ND-CP and Circular 146/2007/TT-BTC of the Ministry of Finance , such as: The Investment and Development - Construction Company did not prepare a land use plan; and did not determine the value of the geographical location advantage with leased urban land to include in the enterprise value.

Furthermore, the Ministry of Construction issued Decision 687/QD-BXD dated July 13, 2016, approving the value of state capital dated March 13, 2008, for the transfer of state-owned enterprises to DIC Corp, which did not comply with the prescribed timeframe.

DIC Corporation - Investment and Construction Development Corporation

Regarding the valuation of construction works on the land, the inspection report also indicated that the consulting unit, Vietnam Appraisal and Valuation Joint Stock Company (VIVACO), incorrectly determined the investment cost and original cost of the two construction works on the land. This resulted in the assessed asset value being lower than the regulations by approximately 2.47 billion VND.

Furthermore, VIVACO also failed to reassess the value of the 25 villas in the Phuong Nam Villa Area as stipulated in Article 19 of Decree 187/2004/ND-CP and Article 6 of Decree 17/2006/ND-CP of the Government. In addition, the company and the Ministry of Construction did not reassess the value of the land use rights for the Dai Phuoc Eco-tourism Urban Area project, but instead used a combination of investment costs, investment value, and project development rights to calculate the value of the privatized enterprise, which is contrary to the provisions of Article 6 of Decree 17/2006/ND-CP of the Government.

Specifically, during the period from the valuation of the enterprise to the conversion to a joint-stock company, the Investment and Development - Construction Company accounted for the losses of 3 subsidiaries, which were approved for settlement by the Ministry of Construction, in the value of state capital as of March 13, 2008, for transfer to the joint-stock company, which is not in accordance with the provisions of Clause 4, Article 21 of Government Decree 109/2007/ND-CP.

The causes and responsibilities for the losses need to be clarified.

Regarding the issue of private placement of shares, the inspection report clearly states that the Ministry of Construction issued Document No. 2023/BXD-ĐMDN dated September 23, 2009 and No. 2128/BXD-ĐMDN dated October 2, 2009 approving the policy of issuing and offering shares privately to increase charter capital, thereby directing that the offering price of private placement shares must be in line with the market price.

The Board of Directors submitted to the General Meeting of Shareholders of DIC Corp a proposal for a minimum selling price of VND 100,000 per share, and the Board of Directors offered the shares at VND 100,000 and VND 102,000 per share. However, the Ministry of Construction, as the owner, did not fully fulfill its responsibility in directing the private placement price of shares in 2009.

Regarding the divestment process and the determination of share value for divestment, the Ministry of Construction approved the divestment plan at the Investment and Development Construction Company without seeking the opinions of the Ministry of Finance and the Ministry of Planning and Investment, which is contrary to the provisions of point b, clause 2, Article 38 of Government Decree No. 91/2015/ND-CP.

The Investment and Development Construction Company also provided incomplete information, leading to the consulting unit failing to reassess the value of land use rights at three locations: 313,887 m2 at the Dai Phuoc Eco-tourism Urban Area project (Nhon Trach district, Dong Nai province); 201,703 m2 at the Ward 4 Commercial Residential Area project (Hau Giang province); and 421.5 m2 of commercial land at 88 Tran Phu Street (Vung Tau city), in order to ensure the valuation closely reflected market prices at the time of share valuation.

Dai Phuoc Eco-tourism Urban Area is one of DIC Corp's major projects.

The total amount of money not yet determined at market price to be included in the provisional share valuation is estimated at VND 1,821 per share, resulting in an estimated share price of VND 14,251. However, the valuation results from the consulting firm and the historical trading price of DIG shares on the stock market were consulted by the Ministry of Construction. Based on this, the Ministry of Construction determined the minimum share selling price to be VND 15,000, higher than the valuation price of the consulting firm (VND 12,430); the executed matching order selling price was VND 19,250, higher than the price determined by the Ministry of Construction. Meanwhile, according to the law on the method of transferring state capital, the selling price of shares through matching orders on the Stock Exchange will be determined by the market.

The inspection agency determined that the violations were the responsibility of the leaders of the Ministry of Construction during the periods 2007-2009 and 2016-2017, the Steering Committee for the equitization of the Investment and Development - Construction Company, VIVACO, and related organizations and individuals.

Based on the inspection results, the Government Inspectorate recommends that the Prime Minister direct the Ministry of Construction to conduct a review of the collective leadership of the Ministry of Construction during the periods 2007-2009 and 2016-2017, as well as related organizations and individuals; require individuals and organizations to rectify the financial consequences; and determine the causes of losses at DIC No. 1 Joint Stock Company, DIC Construction Materials Joint Stock Company, and DIC Tourism Joint Stock Company in order to take measures to address the losses already accounted for in the state capital value at the Investment and Development - Construction Company in accordance with regulations.

At the same time, clarify responsibilities in the valuation of privately issued shares in 2009, as well as review and clarify the failure to reassess the value of land use rights for 3 land locations during the valuation process for state-owned shares to divest; and reassess the value of land use rights at the Dai Phuoc Eco-tourism Urban Area project (Dong Nai).

Source: https://www.congluan.vn/qua-trinh-co-phan-hoa-va-thoai-von-tai-dic-corp-co-hang-loat-sai-pham-thieu-sot-post309688.html