Inspectors discovered a series of land violations in Dai Phuoc urban area, Ministry of Construction took action

A corner of Dai Phuoc eco-tourism urban area project, invested by DIC Group - Photo: DIG Group

Land too cheap?

This is one of the issues discovered by the Government Inspectorate when inspecting the compliance with the law in equitization and divestment of state capital at the Construction Development Investment Company - now the Construction Development Investment Joint Stock Corporation (DIC Group), stock code DIG.

According to the inspection conclusion 1288/KL-TTCP, DIC Group was assigned more than 456.1 hectares of land by the People's Committee of Dong Nai province for the project in November 2004. Of which, more than 238.8 hectares of land was allocated with land use fees and nearly 217.3 hectares of land was allocated without land use fees.

Then on December 27, 2004, Dong Nai Provincial People's Committee issued a document approving land prices for residential projects and production and business projects, including Dai Phuoc ecological urban area, which was approved at 75,000 VND/ ^m2 .

On December 27, 2005, the Dong Nai Provincial Tax Department announced financial obligations on the land area allocated with land collection according to the decision of the Provincial People's Committee, the amount DIC Group must pay is more than 179.1 billion VND, the compensation for site clearance is deducted is more than 133.7 billion VND, the remaining land use fee is more than 45.3 billion VND, the registration fee is 0.5 billion VND.

DIC Group paid more than 45.8 billion VND in financial obligations for land of Dai Phuoc ecological urban area project to the State Treasury of Nhon Trach district in January 2006.

On December 21, 2007, Dong Nai Provincial People's Committee continued to issue Decision 4506 adjusting land allocation decision No. 5510.

Accordingly, the People's Committee of Dong Nai province approved the allocation of more than 456.1 hectares of land to DIC Group to implement the project of building technical infrastructure for the Dai Phuoc eco-tourism urban area. Of which, the land allocation with land use fee collection is more than 249.7 hectares, and the land allocation without land use fee collection is nearly 206.4 hectares.

The land allocated with land use fee collection includes land with long-term use for villa construction of about 86.4 hectares, land for apartment construction of about 30 hectares; land with 50-year use for construction of CBD commercial center of nearly 23.9 hectares, land for golf course construction of 69.2 hectares, land for construction of items such as cultural center of about 7.3 hectares, hotel construction of about 9 hectares, service restaurant of about 7.4 hectares, commercial office area of ​​5.54 hectares, education of 7.1 hectares, healthcare of 3.6 hectares.

The land allocated without land use fee collection of nearly 206.4 hectares is planned to build technical infrastructure of the urban area.

18-hole golf course invested in Dai Phuoc eco-tourism urban area - Photo: DIG Group

Divestment of DIG Group "forgets" land value of 3 projects

In the recently issued inspection conclusion 1288, the Government Inspectorate recommended that the Prime Minister direct the Ministry of Construction to review and clarify the failure to re-determine the land use rights value of 3 land locations (including the Dai Phuoc eco-tourism urban area) during the process of appraising the share price to divest state capital at DIC Group.

The Government Inspectorate also requested the Ministry of Construction to preside over and coordinate with the People's Committee of Dong Nai province to review the determination of asset value as land use rights of the Dai Phuoc eco-tourism urban area project according to the provisions of Article 6 of Decree 17/2006 of the Government.

If the re-determined land use right value is lower than the total investment cost and project development right value calculated into the enterprise value, it will remain the same; if it is higher, it will be paid additionally to the state budget.

According to the recommendation of the Government Inspectorate, during the process of reviewing, examining, handling and overcoming the above limitations and violations, if signs of criminal law violations are detected, the Ministry of Construction will transfer the information to the investigation agency for consideration and handling.

Regarding restrictions and violations at three land locations during the process of divesting state capital at DIG Group, the Government Inspectorate said that the plan to divest capital from DIC Group was approved by the Ministry of Construction in November 2017 in the form of offering on the stock exchange.

However, because DIC Group hired a consulting unit, CPA VIETNAM Auditing Company Limited, to conduct a share valuation, the Government Inspectorate inspected the determination of the value of land use rights included in the share value of the consulting unit.

Thereby, the Government Inspectorate discovered that the valuation certificate No. 110/2017/CTTĐG-CPA VIETNAM implemented 3 land locations of DIC Group, the land use right value was not re-determined to ensure close to the market price at the time of valuation according to regulations.

Specifically, for the Dai Phuoc eco-tourism urban area, by the time of divestment, DIC Group had leased land and contributed capital with land use rights to invest in 5 component projects, with a land area of ​​about 210.6 hectares, the remaining area to be valued is about 38.8 hectares.

However, the new valuation consultancy unit determined the value of the finished land area to be about 7.45 hectares, with a price of about 3.78 million VND/ ^m2 , the remaining land area of ​​about 31.38 hectares was determined according to book value, accounting for about 805.8 billion VND.

The Government Inspectorate said that just determining the value of 7.45 hectares of land for the Dai Phuoc eco-tourism urban area project, the estimated difference in value was up to 381.7 billion VND.

The two remaining land locations are the commercial residential area in Ward 4, Vi Thanh City, Hau Giang, with a difference in value of about 47.2 billion VND, and the land plot at 88 Tran Phu Street, Vung Tau City, with a difference in value determined to be more than 4.7 billion VND.

Determining the value of 3 land plots cheaper than the market price at the time of DIC Group's equitization caused the value of shares upon divestment to decrease by VND 1,821/share.

Ministry of Construction requests review of urban land value in Dai Phuoc

Minister Nguyen Thanh Nghi has just signed document 4559/KH-BXD promulgating the plan to implement the inspection conclusion 1288/KL-TTCP of the Government Inspectorate, accordingly, the Ministry of Construction requested the Department of Planning and Finance to preside over and coordinate with relevant units to urge relevant organizations and individuals to rectify the amount of violations in determining the value of assets on land stated in the inspection conclusion.

At the same time, the Department of Planning and Finance is requested to coordinate with agencies of Dong Nai province to review the determination of assets as land use rights at the Dai Phuoc eco-tourism urban area project, according to Article 6 of Decree 17/2006 of the Government.

Source: https://tuoitre.vn/thanh-tra-phat-hien-loat-vi-pham-dat-dai-tai-do-thi-dai-phuoc-bo-xay-dung-vao-cuoc-20240829110614021.htm