2012: A bad year for Vietnamese tycoons
2012: A bad year for Vietnamese tycoons
2012 is about to pass. Looking back at the business circle, one can see that this was a stormy year for Vietnamese moguls.
There are many tycoons that suffered great failure in business, their property values plummeted, some of the even broke the law and were arrested. Only a few entrepreneurs could expand business and production.
It is not hard to remember the unfortunate moguls this year. The first is Nguyen Duc Kien, Vice Chairman of the Vietnam Professional Football Joint Stock Company (VPF), Chairman of Hanoi Football Club and a founding shareholder of many commercial banks such as ACB, Kien Long...
Kien not only had a very difficult year for the business but is also in prison now. In 2011, Kien’s ACB shares valued up to VND692 billion ($35 million), but in early November 2012, the value of these shares fell to VND524 billion ($26 million).
In addition to the difficult market situation, the loss in value of ACB shares was also be related to the difficulties of ACB when a number of key officials were prosecuted, such as Mr. Tran Xuan Gia, former Chairman of ACB and Ly Xuan Hai, former general manager.
Kien was also prosecuted and detained on charges of "willful contravention of the State regulation causing serious consequences" under Article 165 of the Penal Code.
Not only that, Kien was also prosecuted for fraud to appropriate property under Article 139 of the Penal Code. With these charges, Kien may have to spend a long time in jail.
The second case in the year is Mr. Dang Thanh Tam, Chairman of Saigon Invest Group, Chairman of Kinh Bac Urban Development Investment Corporation.
2012 is definitely an unpleasant year for this tycoon. The total banking debt of Tam and Ms. Dang Thi Hoang Yen, his sister, as he revealed at the last session of the National Assembly, is up to VND10 trillion ($500 million). In the context of very high interest rate, output is difficult, of course, it is a huge burden for this tycoon when every morning, after opening his eyes, he has to think of billions dong of interest money that he has to pay for banks.
But the biggest failure of Tam is his investment in banks. He once said: "Nobody wants to say we failed, but say we are unsuccessful is just a courtesy. Not only banks, but our financial investment activities in general completely failed, even heavily losses. Honestly, if we did not involve in banks, we would have not suffered like this. Profit from industrial parks is not high but we can collect money steadily."
The statistics on the stock market shows that how failure of Dang Thanh Tam in 2012: the total value of assets (stock codes ITA, KBC, NVB, SGT) in 2011 was VND1,395 billion. But the number fell to VND820 billion by early November 2012.
Another tycoon who got a huge loss due to the decline in the value of shares in 2012 is Nguyen Van Dat, Chairman and CEO of Phat Dat Real Estate Development JSC (PDR).
Dat was one of the new faces of the list of the richest people on the stock market in 2010, thanks to the holding of one of the “hottest” real estate share at the time. Value of the shares on the stock market of Dat exceeded VND2.6 trillion in 2010. This number has diminished significantly over the past two years and 76.8 million PDR shares, which Dat holds is only worth about VND930 billion, a decrease of nearly VND515 billion from last year.
The list of "unlucky" tycoons in 2012 is very long, with Mr. Tran Hung Huy (ACB), Dang Van Thanh (Sacombank), Nguyen Thi Nhu Loan, Chairman and CEO of Quoc Cuong Gia Lai Joint Stock Company and others.
As of November 2, the total assets of Dang Van Thanh’s family on the stock market was more than VND1,514.9 billion. Holding 42.7 million shares of Sacombank, Thanh had VND798.4 billion (the price of this share on November 2).
Thanh’s wife, Huynh Bich Ngoc, who has just left from the chairmanship of Bourbon Tay Ninh and from the Board of Directors of this company, also had 36.5 billion of assets on the stock market. Ms. Ngoc also holds shares of the Bourbon Tay Ninh, Bien Hoa Sugar and Sacomreal and Real Estate.
That's not to mention the volume of assets, shares in unlisted companies that members of Dang Van Thanh family are holding, where they also hold vital positions from president to CEO, member of the Board of Directors.
In 2012, Sacombank has undergone a major acquisition from a group of "giant" shareholders. Rumors of the acquisition of Sacombank broke out in July 2011 and immediately, the bank's shares plunged.
In February 2012, Dang Van Thanh and his son were requested by a group of shareholders who hold more than 51% of Sacombank’s chartered capital to change the board of management of Sacombank. From here, captain Dang Van Thanh formally gave up in the biggest acquisitions in the Vietnamese stock market.
But there are tycoons who still worked fairly well in the year. The most significant example is Doan Nguyen Duc, Chairman of Hoang Anh Gia Lai Group. Although this is a difficult year for this group because it also invested a lot of money in real estate, but with bold decisions such as dumping some apartment blocks in HCM City, Duc removed many difficulties for his business and opened an outlet for the real estate market.
Doan Nguyen Duc suffered less difficulty than other tycoons because the loans from banks are not too big on the total investment, around VND6 trillion.
At the end of 2012, Hoang Anh Gia Lai Group decided to invest in Hoang Anh Attapeu Sugar, worth $100 million in Laos, with a capacity of 7,000 tons a day. The government is considering to allow this group to import more than 100,000 tons of sugar a year from Laos to Vietnam.
This project is likely to bring success for Hoang Anh Gia Lai because Vietnam and Laos have a preferential tariff agreement, so a number of goods imported from Laos will be entitled to preferential interest rate of 2.5% instead of 5% as from ASEAN ...
Although in the general context, the value of more than 25 million HAG shares that Doan Nguyen Duc owns also decreased, but the total assets of this mogul have increased sharply compared with the previous year.
By the end of May 2012, Duc’s property increased by VND2.5 trillion compared with the end of 2011. In the next two months, each month, Duc's assets rose by VND300 billion thanks to the increase of the price for his stock. By the end of July, when HAG closing price was at VND29,200, the value of assets on the stock market of Duc was VND7,582 billion. On average, each month the value of the assets of Duc increased from VND300 to VND500 billion.
On the list of enterprises that obtained good business results in 2012, there is another impressive case - the Vietnam Dairy Products Joint Stock Company (Vinamilk). In the third quarter of 2012, this company earned profit of more than VND1,390 billion.
Vinamilk CEO Mai Thi Kieu Lien was selected as one of the outstanding business leaders in Asia by the Corporate Governance Asia Journal, a magazine specializing in corporate governance based in Hong Kong.
vietnamnet
