Company director held for appropriating $2.1 mil loan

Police in Ba Ria-Vung Tau Province have arrested the director of Phu An Sinh Trading & Food Processing Co Ltd. for appropriating loans totaling over VND45 billion, or about US$2.1 million, from the State budget.

Pham Van Minh, 46, whose company is among the most well-known livestock breeders and safe food providers in the country, was arrested yesterday and could be prosecuted for “illegal use of assets”.

Police also searched his home in District 12, Ho Chi Minh City, and his office in the province’s Tan Thanh District for materials related to the case.

The loans Minh appropriated had been granted to his company under the provincial government’s non-interest lending plan intended for businesses that took part in a program to mobilize consumer prices for the sake of the public.

In late 2010 the provincial Department of Industry and Trade, under the authorization of the local People’s Committee, granted an interest-free loan of VND16.5 billion ($791,000) for Phu An Sinh to buy and store pigs, chickens and other goods, and then provide them at prices approved by local authorities for the period from November 2010 to May 2011.

Under the contract signed between the company and the department, the company had to return the loan in full when the program ended, but the company only repaid about VND6.5 billion.

Defiance of court judgment

In a similar case, the company has not repaid a loan of more than VND35 billion ($1.7 million) – also at the 0 percent interest rate – to the local Department of Agriculture and Rural Development.

In mid 2010, when the blue ear disease spread widely among pigs, the department gave the loan to Phu An Sinh so that the company could buy healthy pigs for reserve to stabilize supply to the market.

After failing to recover the loan despite many payment requests made to Phu An Sinh, the department sued the company in the Tan Thanh District People’s Court in July 2011.

At a hearing on November 10, 2011 the court ordered Phu An Sinh to repay more than VND35.5 billion, including VND33.5 billion as the principal, and the rest as late-payment interest. The company, however, has ignored the court’s judgment.

Tuoi Tre has learned that the lenders had not requested Phu An Sinh to deposit any of its property as security for its loans, and this easy practice has contributed to the company’s loan appropriation.