Board members, shareholders divided over fate of CSG
By Thanh Thuong - The Saigon Times Daily
HCMC – The fate of the money-losing cable producer Saigon Cable Corporation (CSG) is left hanging after its shareholders’ annual meeting on Saturday as board members as well as shareholders were deeply at odds over whether to dissolve the company, scale down its chartered capital, or keep its operation status quo.
The meeting lasted over six hours with heated arguments among board members and shareholders regarding the company’s fate. At the end of the meeting, all solutions failed to meet the conditions and legal bases to be passed.
CSG’s management board presented two proposals, which were either to dissolve or to reduce chartered capital from VND300 billion to VND80 billion. However, at the meeting, shareholders asked for other solutions so that the company could continue to operate.
But, according to the vote counts of the meeting, 64.58% of 144 shareholders who hold a 71.77% stake agreed with the dissolution solution. Meanwhile, 8.47% agreed to reduce chartered capital and the rest wanted the company to continue its operation.
Pham Hong Son, CSG’s vice board chairman, at the meeting presented a business strategy which was previously vetoed by board members. Son said he wanted to maintain the company owing to large cash amount of VND235 billion retained from last year and change the strategy by investing in multiple sectors such as gold exploitation and rubber cultivation in Cambodia, instead of only producing electric cables.
Meanwhile, Do Van Trac, representative for the 31% stake in CSG held by Sacom Investment and Development Corporation and board chairman of Sacom, rejected the proposal of continuing the operation. Trac, who also serves as board chairman of CSG, said “it is not easy for CSG to make any profit during the current situation as the management of the board of directors is weak.”
Board chairman Trac and Son at the meeting disagreed on whether to maintain or dissolve CSG. Such internal disagreements encountered the objection of shareholders.
Trac said that if shareholders did not agree with the dissolution, Sacom would take over the whole CSG.
According to general director Pham Ngoc Cau, the most important thing at this time is how the company can preserve its capital, especially when its business operations are affected strongly as telecom firms have now turned to use fiber cables instead of telecom cables.
Information concerning the possible dissolution has also prompted CSG’s customers to cancel their contracts with the company, he added.
CSG last year obtained VND227 billion in revenue and VND10.3 billion in after-tax profit.