Hanoi(VNA) - The Government Inspectorate (GI) has announced conclusion of itsinspection of the acquisition of Audio Visual Global (AVG) by State-ownedcommunications giant Mobifone, and proposed starting legal proceedings andinvestigation into the case. In an announcement issued on March14, the GI said the case was extremely serious, as Mobifone, the Ministry ofInformation and Communication and related agencies had committed manywrongdoings during the process of acquisition. Thus the GIrecommended that the Prime Minister instruct the Minister of Information andCommunication to consider and annul the decision approving Mobifone’sinvestment in television service and transfer the case to the Ministry ofPublic Security for investigation.  The GI’sinspection found that Mobifone was irresponsible and broke regulations in theacquisition, especially in the assessment of AVG’s financial situation,allegedly leading to State budget losses of 7 trillion VND, and affectingMobifone’s finance in following years, resulting in difficulties in theequitisation of the company. AVG faceddifficulties from its establishment to the time of business valuation in March2015, with accumulated losses of more than 1.6 trillion VND, accounting for 45percent of its charter capital. However, Mobifonewas dishonest in reporting the financial situation of AVG to the Ministry ofInformation and Communications (MIC) during the acquisition process. According to theGI, the assessment violated regulations in investment and managing and usingState capital in enterprises. The GI statedthat the responsibility for the wrongdoings went to the Board of Members, Boardof Directors, the chief accountant and other relevant departments of Mobifone.

TheGI was also of the view that the Ministry of Information and Communication(MoIC), as the representative of the State ownership and the State agency incharge of management of information and communication, showed a lack of responsibilityin assessing the acquisition. It decision 236/QD-BTTTT dated December 21, 2015approving the acquisition had violated legal rules, causing serious losses ofState capital and thus must be annulled, the GI said.

Inaddition, the acquisition was not eligible for being classified as a Statesecret, but the ministry asked the Ministry of Public Security to include it inthe list of classified information, which violated Articles 5, 14 and 17 ofDecision 36/2014/QD-TTg on issuing regulations on the publishing of informationof State-owned one-member limited liability companies.

MoICofficials in charge of the case must bear responsibility for the violations,the GI said.

🐎 A day before theGI’s announcement, Mobifone and AVG decided to cancel the transfer of344.66 million shares and refund each other the amount received under theagreement.

AVG shareholderswill refund the entire amount paid by Mobifone, while Mobifone will return toAVG the number of shares and assets transferred. The two sides will also try tonot let the other party suffer more damages. In addition tothe amount paid to AVG, Mobifone said it had to pay some related expenses, suchas consultants’ fees. AVG has agreed to share this expense with Mobifone. In early 2016, Mobifone announced theacquisition of AVG to expand its television network, one of the company’s fourmain business areas. The details of the deal were not disclosed. In August 2016,the Government promulgated Document No 1344/TTg, asking the GI to investigatethe acquisition. On March 9, theParty Central Committee’s Secretariat issued a letter on the handling ofMobifone’s acquisition of 95 percent of AVG shares, calling the issue aserious, complicated and sensitive matter, and asked the GI to soon release theinspection results. The Secretariat assignedthe Government and the GI to review and handle the case in an objective andaccurate manner to ensure that punishment is given to the right person and lostState assets are revoked.-VNA