Party inspectors propose coal and minerals group chairman be sacked

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VietnamNet English - 65 month(s) ago 2 readings

Party inspectors propose coal and minerals group chairman be sacked

Quang Ninh province officials early this year reported that around 10 million tons of coal have been exported illegally, causing losses of around 4.5 trillion dong (US$265 million) to the state budget.

VietNamNet Bridge – The Party Central Inspection Committee has issed a formal warning to Doan Van Kien, the Chairman of the Vietnam Coal and Minerals Group (VINACOMIN), and has proposed his dismissal, an anonymous source from the VINACOMIN said.

Coal smuggling sparks official crackdown

Tien Phong newspaper reports that the source said Kien drew the Party Central Inspection Committee’s warning for nepotism. Specifically, he is charged with signing and asking his subordinates to sign a decision permitting the Trade and Service Investment JS Company, where his younger brother Doan Van Thuc holds a deputy director post, to mine minerals at VINACOMIN’s mines without licences.

Kien was also faulted for poor management, which has led to uncontrolled coal mining in recent years.

It is said that Kien also breached the government’s regulations on project management and that his irresponsibility led to VINACOMIN’s taking losses in a deal with the ‘Quang Ninh Province Industrial Development JS Company.’ The latter company is said to have mined and traded millions of tons of coal illegally.

The Party Central Inspection Committee recommended that the Prime Minister dismiss Kien from the VINACOMIN Chairmanship, says Tien Phong. VINACOMIN (the Vietnam Coal and Minerals Group, also called TKV after its Vietnamese initials) is a state-owned conglomerate uniting several dozen smaller companies in the mining sector.

In early 2008, Vietnamese media reported that unsanctioned coal mining was widespread in the coastal province of Quang Ninh, Vietnam’s coal area. Dozens of people were prosecuted for illegally exploiting and exporting coal.

Almost all of Vietnam’s coal deposits are in the northeast coast province of Quang Ninh. According to VINACOMIN, there are 10.5 billion tons of exploitable reserves.

Quang Ninh province officials early this year reported that around 10 million tons of coal have been exported illegally, causing losses of around 4.5 trillion dong (US$265 million) to the state budget.

VINACOMIN reported legal coal production of over 50 million tons in 2008. It provides 15-20mil tonnes of coal to domestic consumers, while the remaining volume is exported, mainly to China.

On July 31, 2008 Prime Minister Nguyen Tan Dung asked the Ministry of Industry and Trade to fix the responsibility and impose suitable penalties on the VINACOMIN officials and subsidiaries for offenses related to illegal coal mining in Quang Ninh.

Wrong-doings in the past

VINACOMIN Chairman Doan Van Kien also received a Party warning when he was the General Director of the Vietnam Coal Corporation (predecessor of VINACOMIN) in 2001. VCC was found to have violated Government rules on borrowing foreign capital and paying foreign debts as well as illegally trading in foreign currencies.

According to the government inspectorate then, Kien’s corporation was over 300 trillion dong (about $200 million) in debt by 1999 in consequence of shortcomings byVCC officials and its subsidiaries under the aegis of Kien.

Mistakes in controlling coal exports caused losses of $1.2 million in 1998 and $486,000 in the January-September period of 1999. Specifically, the corporation’s Import-Export Department designed the export prices for coal without consulting related agencies and submitted the price table to Kien for his approval. Consequently, many coal exporting contracts were signed at unfeasibly low prices, causing losses for the corporation’s subsidiary, the Coal Export and International Cooperation Company (Coalimex).

Government inspectors also found out many other violations of the Vietnam Coal Corporation in facility construction projects, which incurred nearly 2.1 billion dong of losses to the state budget. The corporation’s officials breached the bidding and foreign capital borrowing and foreign debt paying rules.

Specifically, the corporation borrowed $30 million from Hong Kong’s Citicop and paid $585,000 as the expenditure for the getting the loan, without vouchers.

Up to four of the six joint venture companies invested by the corporation worked ineffectively and committed many violations.

Remarkably, however, despite these mistakes, Kien was retained as Chairman of the Vietnam Coal and Minerals Group when it was formed in 2004.

VietNamNet/Tien Phong

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