Former executives of state-owned real estate firm arrested

Nguyen Phuoc Ngoc, former general director of the Saigon Real Estate Corporation (Resco), and Nguyen Tin Trung, the company's former chairman were detained Thursday over management violations.

Ngoc and Trung were arrested by HCMC police in a case involving breach of regulations on the management and use of state assets, causing loss and waste.

Resco is a 100% state-owned company belonging to the HCMC People's Committee. Four other company personnel including board members and supervisors have been placed under investigation in the case, but have not been detained.

All six people implicated in the case so far are suspected of committing violations in the transfer of two properties on Ly Thuong Kiet street and Hong Bang street in District 11 that caused an estimated damage of VND95 billion ($3.82 million) to the state. More details of the case have not been made available.

The arrest of two senior executives is the latest development after four months of investigation.

Resco was established by the HCMC People's Committee in 1997 to invest in and implement construction projects including housing for resettlement, social housing and other residential apartments.

In 2010, the corporation was converted into a one-member limited liability company with several subsidiaries, joint ventures and associates.

Resco is currently implementing many real estate projects in the city. It has invested VND2,250 billion ($90.46 million) in 32 units, of which 14 are loss-making with accumulated losses amounting to tens of billions of dong (VND1 billion = $40,200). Bad debts are estimated at VND1,473 billion ($59.22 million).

However, it has not proposed solutions to address its financial problems for the People’s Committee to consider; and it has also not completed divesting from its non-core businesses as directed by the Prime Minister.

It is alleged that the corporation did not act in accordance with the Enterprise Law in appointing representatives to represent state capital.

Ngoc, another former Resco general director Nguyen Dinh Phu and former supervisor Nguyen An Truong have been reprimanded by the Inspection Committee of the HCMC Party Committee.