Former Vinafood II leader detained for involvement in HCMC 'golden land' acquisition

Ho Chi Minh City police have detained Huynh The Nang, former general director of the Southern Food Corporation (Vinafood II), for his involvement in the acquisition of “golden land” covering over 6,000 square meters in the city center.

Nang, 64, had already been placed under house arrest pending an investigation into violations at Vinafood II and related units.

On October 27, HCMC police launched legal proceedings against Nang and Dinh Truong Chinh, former director of Viet Han Trading, Advertising, Construction and Real Estate Co., Ltd ("Viet Han Company"), for "violating regulations on the management and use of state property, causing losses and wastefulness" under Clause 3, Article 219 of the Penal Code.

According to the police, Nang and Chinh had violated legal regulations on the management and use of a plot of land at No. 33 Nguyen Du street and No. 34 - 36 - 42 Chu Manh Trinh street, Ben Nghe ward, District 1, causing serious damage to the state.

The municipal police’s investigative agency is focusing on expanding the investigation and applying legal measures to strictly punish the individuals involved and recover lost state assets.

Viet Han Company was established in 2006 in HCMC with initial charter capital of VND320 billion ($13 million under the current exchange rate), which was then increased 5 times to VND1.6 trillion ($65 million). Of which, 49% was owned by Chinh, 39% by Ha Tay Investment and Development JSC, and the remainder by a number of individuals.

In 2022, HCMC authorities decided to recover 6,274.5 square meters of land at No. 33 Nguyen Du street and No. 34 - 36 - 42 Chu Manh Trinh street. This land was transferred by Viet Han Saigon Trading, Services and Construction Company Limited (Viet Han Saigon Company) from Vinafood II.

The area was being used as a dormitory for Vinafood II staff, but it was intended to be turned into a high-end hotel, office building and commercial center for rent. Vinafood II and Viet Han Company established a joint venture named Viet Han Saigon Company to implement the project in 2009. Vinafood II contributed 20% of the joint venture’s capital with part of the land use rights, and Viet Han Company 80% in cash.

In 2009, the investor offered a compensation price of VND105 million ($4,270) per square meter of land but failed to gain residents’ consensus.

In mid-2018, compensation and site clearance for the project restarted, but the investor kept the compensation price at VND105 million per square meter so an agreement could not be reached.

In November 2018, Viet Han Saigon Company sent people to barricade the dormitory in an attempt to illegally take over the land. The residents repeatedly protested and even submitted petitions to local authorities, but the situation continued.

On December 2, 2020, the Government Inspectorate issued a conclusion on Vinafood II's violations in the transfer and use of real estate at the location.

The document clearly stated that Vinafood II did not implement plans to rearrange the four land lots and attached properties, failed to select a capable partner to implement the project, and did not conduct a strict divestment or make compensation and relocation support plans for 34 households residing there.

In the first half of 2023, Vinafood II posted net revenue of VND11.34 trillion ($477.5 million), up 58%, and an after-tax profit of nearly VND10 billion ($421,200), doubling year-on-year.

As of June 30, the corporation had total assets of nearly VND8.84 trillion ($372.4 million), with inventories of VND2.98 trillion ($125.4 million), up 2.6 times compared to the beginning of the year.

This year, Vinafood II has set a revenue target of VND8.7 trillion ($366.4 million) and a pre-tax profit target of VND2.5 billion ($105,300).

Vinafood II, registered on the unlisted public company market (UPCoM) as VSF, closed Thursday at VND36,800 ($1.52) per share.