Company founders register $6.2 billion capital in 'drunken haze'

Vietnam’s registered capital of new companies skyrocketed 77 percent year-on-year in January with the establishment of USC Interco, a real estate company whose existence was not known even to industry insiders.

But the company became the cynosure of media eyes as its registered charter capital was more than half of 8,300 new companies in January. It was even bigger than that of telecom giant Viettel, only behind state-owned oil firm PetroVietnam and national utility Vietnam Electricity.

Reporters rushed to the registered company headquarters in the western district of Hoai Duc to learn more about this new giant in the real estate industry, only to see an ordinary three-storied house and to learn that the registration was a mistake.

Kim Thi Phuong, one of three founding members USC Interco and a resident of the house, said she was shocked to hear that she was responsible of contributing VND43.2 trillion ($1.86 billion), or 30 percent of the company’s charter capital.

"I don’t know anything. My partners were drinking, so they must have made a mistake," said Phuong, who runs a water delivery business.

Phuong said she’d agreed to form the company following the advice of Nguyen Hoan Son, a co-founder with a 40 percent stake, to advance her business, assuming that the charter capital was several billion dong (VND1 billion = $43,200).

"Luckily, I learned about it and canceled it early. Who knows what would happen if a problem arose later," she said, telling reporters that she has asked for the Ministry of Planning and Investment permission to terminate the business.

USC Interco was registered for 59 different businesses with real estate as the main focus. Its CEO was listed as Tran Gia Phong, a shareholder with a 30 percent stake, but his registered ID belonged to another person.

Both Phong and Son have not been reachable since the news broke out.

However, officials have said that registering the charter capital by mistake as Phuong said is unlikely.

A representative of the Hanoi Business Registration Office said that the business founders need to make many detailed statements, and officials had repeatedly asked for confirmation of details in the case of USC Interco, due to the unusually high charter capital.

Businesses are allowed to freely register their capital to simplify administrative procedures, and the case of USC Interco is uncommon, as most shareholders stay committed to their statement, the representative added.