Foreign investment funds leave path of ruinous promises
Foreign investment funds leave path of ruinous promises
Vietnam has seen the appearance of foreign investment funds committing thousands of billions of dong for a stake in Vietnamese enterprises, but many of them remained empty promises with the unannounced disappearance of investors, according to newswire Dauthau.vn.
One of these was Global Emerging Markets Group (GEM) from the US. GEM has the total asset value of $3.4 billion and numerous subsidiaries over the world. After 25 years of operation, GEM has carried out 305 investment projects in 65 countries.
In 2014, the group announced to pour capital into a number of Vietnamese enterprises, including VND800 billion ($35.4 million) in FLC Group, VND200 billion ($8.98 million) in Hoang Huy Group (HHS), and VND400 billion ($17.97 million) in Duc Long Gia Lai Group (DLG), to become the strategic investor. Besides, GEM committed to investing VND1.7 trillion ($76.38 million) in Hoang Anh Gia Lai Group and expected to complete the transaction within three months.
However, the investor disappeared for no reason and the actual share volumes bought by GEM made up only a little part of its commitments.
Another example is Hong Kong-based Dragon Best International Group. The group signed a frame contract with Ho Tram Tourism JSC, a Vietnamese private company, on its investment in three big projects with the total investment capital of $100 billion.
The first project concerned a complex of trade, finance, hotel, apartment blocks, and international convention centre in Ba Son and Tan Cang in Ho Chi Minh City, capitalised at $32 billion. The second one was Ho Tram International Ecotourism Site and the project on expanding Phuoc Buu town in Xuyen Moc district in the southern province of Ba Ria-Vung Tau, capitalised at $18 billion. The third one was Bo Y Border Gate Economic Zone, with an estimated investment capital sum of $50 billion. The construction works of these projects have yet to be implemented.
The disappearance of foreign investors not only left unfinished projects behind, but also had a negative impact on the hopeful Vietnamese partners.
Notably, when GEM announced to invest in the three groups above, the share values of FLC, HHS, and DLG skyrocketed, only to be followed by a plunge after GEM withdrew. In particular, Hoang Anh Gia Lai has suffered several thousand billion dong losses.
