Four downtown HCMC plots covering nearly 6,300 sq.m have been reclaimed after violations by state-owned Vinafood 2 let it fall into private hands at a fraction of their market value.
The decision to reclaim the land plots at 33 Nguyen Du street and 34-36 and 42 Chu Manh Trinh street in Ben Nghe ward, District 1 was issued by the municipal People’s Committee following the Government Inspectorate’s conclusion in January 2021 that several actions taken to develop them were illegal.
The plots of land had been allocated by the city administration to the wholly state-owned Vinafood 2 in 2015 to invest in a hotel, office and trade center project for 50 years.
Vinafood 2 then partnered with private firm Viet Han Real Estate Trading-Advertising- Construction Co., Ltd. to exploit the land by establishing the Viet Han Saigon Trading-Construction-Service Co., Ltd., but later divested from the venture, leaving the land in private hands.
The value of the land plots was determined to be VND730 billion ($30.83 million) at the time. However, the Government Inspectorate estimated the land use fee of the four land plots in 2015 was more than VND1,979 billion ($83.59 million).
According to the inspection agency, in the process of project implementation, Vinafood 2 had intentionally violated the Prime Minister’s instructions four times, including: not making a plan on using the four land plots for approval as they were state-owned land; arbitrarily cooperating with Viet Han Company; not developing a plan to divest capital from Viet Han Saigon Company at the request of competent authorities; not making plans on compensation and relocation of 34 households living in the area; and using the land use right certificates as collateral to borrow thousands of billions of dong against the law (VND1 billion = $42,240), together with Viet Han Company.
The committee decided that the Viet Han Saigon Trading-Service-Construction Co., Ltd must hand the land over to the city’s Land Fund Development Center and fulfil related financial obligations.