Sacombank strikes share debt deal with founder
Sacombank strikes share debt deal with founder
Sacombank (STB) has signed an agreement with Dang Van Thanh, the bank's former chairman-cum-founder, and his son Dang Hong Anh to use nearly 80 million shares of their holdings to pay off around VND1.6 trillion (US$76.2 million) worth of loans provided to them and their affiliate companies.
The agreement was signed on December 5, 2012 but the transaction was only publicly announced on the HCM City Stock Exchange on Wednesday.
The bank explained that it had sent a report about the transaction to the HCM City exchange and the State Securities Commission on March 12, but the report had been lost.
Following the agreement, Sacombank has the sole discretion to buy, sell or dispose of the shares (equivalent to over 7.4 per cent of Sacombank's charter capital) to deduct from their loans and investments.
The largest amount is around VND678 billion ($32.3 million) worth of loans provided to the property developer Sacomreal (SCR), followed by VND329 billion ($15.7 million) worth of investment bonds in Sacomreal and VND192 billion ($9.1 million) worth of investment bonds in Thanh Thanh Cong Company.
However, because Dang Van Thanh and his son are still members of the bank's board of directors, these shares cannot be sold.
Sacombank will hold its shareholders' meeting on April 25, after which Thanh and his son will leave their positions and the shares will be sold.
According to Sacombank chairman Pham Huu Phu, the bank already had two individual buyers in place to purchase the shares at a negotiated price of VND20,900 ($1) a share.
"By May 31, Sacombank will have collected almost VND1.67 trillion ($79.5 million), including capital and interest on the amount lent to the companies related to Thanh and his family," Phu was quoted as saying by Nguoi Lao Dong (Labourer) newspaper.
STB shares are currently trading at over VND21,000.
According to the conclusion of inspectors from the State Bank of Viet Nam in January 2013, the total value of loans provided to Thanh Thanh Cong Company and other related companies was estimated at around VND7 trillion ($333.3 million), higher than regulated by law.
Thanh Thanh Cong Company is a large sugar company owned by Thanh's wife, Huynh Bich Ngoc.
The Law on Credit Institutions stipulates that a bank may not lend companies related to members of the board of directors more than 25 per cent of its charter capital. However, loans to companies related to Thanh's family came to over 50 per cent of Sacombank's charter capital.
The central bank has asked Sacombank to reduce the rate of lending to companies related to Thanh to 25 per cent of its charter capital by the end of December this year.
vietnamnews
