Legal proceedings launched against CEO of agricultural machinery major VEAM

The Vietnam Engine and Agricultural Machinery Corporation (VEAM) has dismissed Phan Pham Ha as general director amid an investigation into "abusing positions and power while on duty," the firm said in a release on Tuesday.

A day earlier, the investigative agency of the Hanoi Department of Public Security notified VEAM about a decision to launch legal proceedings against Ha per the Penal Code.

The agency has not provided specific information about the case related to the general director.

In another development, also on Tuesday, VEAM announced the dismissal of Nguyen Thi Mai Huong as chief accountant.

Legal proceedings have previously been launched against sitting and former executives of the corporation. In October 2023, Nguyen Thanh Giang, former general director of VEAM, was placed under house arrest; and Ho Manh Tuan, deputy general director, was detained pending investigations into suspected management violations.

In May 2022, Tran Ngoc Ha, former chairman of VEAM, was sentenced to 11 years in prison for violating regulations on management and use of state assets.

Former VEAM general director Lam Chi Quang was sentenced to eight years in prison on the same charges. Quang was held responsible for signing the loan guarantee documents.

Established in 1990, VEAM is a "giant" in the field of manufacturing and trading machinery and spare parts for agro-forestry-fishery production and transportation.

VEAM has 15 subsidiaries operating in three main areas: agricultural engines and machines, supporting industries, and truck manufacturing.

It currently holds a 30% stake in Honda Vietnam, 20% in Toyota Motor Vietnam, and 25% in Ford Vietnam Limited, three leading automakers in the country.

Before 2019, VEAM was recording consolidated net revenue of over VND6 trillion ($235.83 million under the current exchange rate) and gross profit of more than VND600 billion ($23.58 million) per year. But in 2019, the respective figures dropped to VND4.5 trillion and VND65 billion. During 2020-2022, the corporation’s revenue returned to pre-2019 levels, but gross profit recovered significantly, surpassing VND651 billion in 2022.

According to its consolidated financial statement for the fourth quarter of 2023, VEAM had VND12,913 billion ($507.5 million) in deposits, an increase of more than VND300 billion ($11.8 million) compared to the beginning of the year. In 2023, the corporation gained VND6,233 billion ($245 million) in net profit, down 18% compared to 2022.

The Ministry of Industry and Trade, which has an 88.5% stake in VEAM, has asked the corporation to implement several solutions to implement its 2024 plan.

Under this plan, VEAM will have to complete its restructuring project, divesting capital from companies that have been operating inefficiently as well as areas not in line with its future development orientation.

The company will also address the issue of cross-ownership involving those that VEAM has contributed capital to, and focus resources on firms with suitable business lines.

The corporation, registered on the Unlisted Public Companies Market (UPCoM) as VEA, closed Tuesday at VND47,400 ($1.86) per share.