Poor governance led to Vinashin’s financial wrongdoings

Vinashin is on the brink of bankruptcy is thanks to poor oversight, dereliction of duty and intentional wrongdoings, Prime Minister Nguyen Tan Dung said in a detailed report to the National Assembly deputies.

The 12th National Assembly sitting, which is scheduled to last until November 27, will not have a special session to grill officials over the Vinashin scandal.

Vinashin’s false financial reports

The state-owned Vietnam Shipbuilding Industry Corporation’s outstanding debt stood at about VND90 trillion (US$4.5 billion). The group’s leaders had kept making up financial reports to the Government in recent years.

Last year, Vinashin suffered losses of VND1.6 trillion but it reported its profit of VND750 billion. The shipbuilding group also posted its profit of VND100 billion in the first quarter of this year.

This has mislead the authorized agencies in taking prompt measures to tackle the group’s financial woes.

Irresponsible in the mobilization, management and use of the state capital, have pushed Vinashin to the brink of bankruptcy.

The Government also confessed that the management and implementation of state ownership in Vinashin had been inadequate and confused.

The Government said that the mechanism for evaluation, monitoring and auditing were inefficient. And the Ministry of Transport had failed to find out the group’s wrongdoings promptly.

Teams of inspector and auditor who worked separately with the shipbuilder many times between 2006 and 2009 had failed to unmask the group’s false reports.

The government has taken drastic measures such as improving the management of institutions of state, request the review what have been done, not done, proposals to raise the effectiveness of the management in the state-owned enterprises.

The Prime Minister has asked corporations to get the authorized agencies’ approval for their foreign loans, newly-established offshoots, and capital contrition to new business.

Five-year plan on development and investment of the corporation must been managed and proved by the ministries of finance; planning and investment.

The authorities have been clarifying who to take responsibility to Vinashin’s wrongdoings, Ha Van Hien, Chairman of the National Assembly’s Economic Committee, told reporters on the sidelines of the NA sitting.

The NA’s Economic Committee couldn’t detail the case while investigation is being taken into the group. Vinashin’s financial wrongdoings were due to poor governance.

It’s necessary to clarify the management role of the state and the role of state ownership in the upcoming restructure of corporations and companies in the state-owned.

NA deputy Vu Quang Hai, who took many times to ask Vinashin issues, said, Prime Minister has claimed responsibility for the Government’s oversight in Vinashin case; and the government has sent a detailed report on the case to NA, showing that NA deputies’ opinions have been paid attention.

The National Assembly deputies have unsatisfied with the report.

According to General Government Inspectorate Director Tran Van Truyen, the investigation into Vinashin will be wrapped up by the end of this month. The investigation result will be submitted to Prime Minister.