Sitting, former executives of agricultural machinery major VEAM arrested

A deputy general director and a former general director of the Vietnam Engine and Agricultural Machinery Corporation (VEAM) have been arrested pending investigations into suspected management violations.

A decision issued by the investigative agency Wednesday states that the arrested individuals will be investigated under the Penal Code for possible violations of regulations on the management and use of state assets, causing losses and wastefulness.

The decision names Nguyen Thanh Giang, 74, former general director of VEAM, as being placed under house arrest because he is being treated for diabetes and kidney failure.

The other suspect detained is Ho Manh Tuan, 60, former head of VEAM’s technical department, chairman of VEAM Korea for the 2003-2009 period and deputy general director of VEAM from 2016 to date.

According to the investigative agency, between 2005 and 2011, Giang directed a number of his subordinates, including Tuan, to prepare reports and proposals to purchase 305 sets of SV110 car cabin molds, which violated regulations on state-owned enterprises’ investment and purchase of fixed assets. It said the above assets were not used, leading to a waste of nearly VND27 billion ($1.1 million).

Giang and Tuan are not the first VEAM officials to be investigated for mismanagement and violation of regulations.

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.

Ha was found guilty of allowing his subordinates at VEAM to advise and submit guarantees for bank loans granted to Vetranco, a VEAM subsidiary. He was also held responsible for deciding to spend money on two projects that were stalled midway.

Ha's actions caused over VND127 billion ($5.47 million) in damage to VEAM, investigators said. The jury noted that during the trial period, his family had paid VND1 billion towards mitigating the consequences.

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.

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

VEAM’s main business is manufacturing, assembling and trading in agricultural machinery and trucks, but most of the corporation's annual profit comes from its joint ventures and associates.

VEAM reported a combined profit of VND1.18 trillion ($50 million) from eight joint ventures and associates in the first quarter of this year, down 11% year-on-year. This accounted for 85% of its after-tax profit for the period.

As of March 31, 2023, the value of its assets stood at VND28.41 trillion ($1.2 billion), up 3% compared to the beginning of the year. Cash and bank deposits of VND15 trillion ($639.7 million) accounted for 53% of total assets, of which term deposits were worth VND14.74 trillion ($628.4 million).

The Vietnamese manufacturer, registered on the unlisted public company market UPCoM as VEA, closed Wednesday at VND36,900 ($1.51) per share.