Former HCMC official accused of causing $10.7 mln losses in public land violations

Investigators from the Ministry of Public Security have told prosecutors to indict Tai for "violating regulations related to the management and use of state-owned property that caused losses or wastefulness," a crime that carries a jail term of 10-20 years.

Four others, three of them officials, face the same charges. They are Nguyen Hoai Nam, former secretary of the District 2 Party unit; Dao Anh Kiet, former director of the city Department of Natural Resources and Environment; Truong Van Ut, former deputy head of the department’s land, natural resources and environment office; and Le Thi Thanh Thuy, president of Mayflower Investment Company Ltd and Lavenue Investment JSC.

Tai, 68, served as HCMC vice chairman between 2011 and 2015.

In 2018 government auditors concluded he was mainly responsible for the city’s decision to lease out a land lot at 8-12 Le Duan Street in District 1 without competitive bidding, causing multimillion-dollar losses to the city.

The nearly 5,000-square-meter plot was earmarked for construction of a five-star hotel and mall.

The Government Inspectorate said city authorities should have carried out a bidding process to select a prestigious and experienced investor.

Instead they allowed the establishment of a joint stock company in 2010 to carry out the project following requests from the Ministry of Industry and Trade, units belonging to whom had been leasing the land.

The HCMC Housing Management and Trading Company held a 50 percent share in the new company and Lavenue Investment JSC and the ministry’s units owned the rest.

Two months after incorporation the companies under the ministry sold 80 percent of their shares in Lavenue to two private companies, Mayflower and Kinh Do Investment Company.

In June 2011 Lavenue received the city government’s approval to build the hotel by paying the city nearly VND700 billion ($30.6 million). However, no construction has taken place for years and the lot is now used for parking cars.

The land lot at 8-12 Le Duan Street in District 1, HCMC, serves as a parking lot. Photo by VnExpress/Quynh Tran.

State inspectors said the transaction showed "special favor" to the private companies. It violated Vietnam’s laws on bidding, public asset management, as well as regulations on land use, public land prices and public fund management.

Tai and his accomplices' actions have caused losses of over VND250 billion, of which VND4.7 billion was the value of the structures on the land at the time of the violation and VND248 billion was the amount from the state budget that has yet to be recovered due to the illegal land transfer and lease.

The lot, which stands in the heart of the city, not far from iconic buildings such as the Central Post Office, the Notre-Dame Cathedral and the Independence Palace, has "special value," inspectors said.

The cost to rent it, in line with the market price, is more than VND3.5 million ($150) per square meter per year.

Following investigations, authorities found that Tai had had a personal relationship with Le Thi Thanh Thuy and so approved to lease out the 5,000 m2 land lot to Thuy's company without a bidding process.

Kiet, Nam and Ut recommended Tai to approve these illegal decisions despite knowing that documents relevant to the project were still lacking, authorities said.