Former senior HCMC official arrested for public land sale violations

The Ministry of Public Security said Tai, vice chairman of the city between 2011 and 2015, had violated banking regulations as well as regulations on managing and using state property, causing waste and losses.

Three other officials are also facing the same charges: Nguyen Hoai Nam, former secretary of District 2’s Party unit; Dao Anh Kiet, former director of the city’s department of natural resources and environment; and Truong Van Ut, former deputy head of the land, natural resources and environment office under the department.

In May, government inspectors concluded that Tai, 66, holds the main responsibility for the city’s decision to lease out a land lot at 8-12 Le Duan Street in District 1 without organizing any auction, causing million-dollar losses to the state budget.

The land lot of nearly 6,000 square yards on Le Duan Street in District 1, Ho Chi Minh City. Photo by VnExpress/Nhu Quynh

The land lot of nearly 5,000 square meters (nearly 6,000 square yards) was designated to be developed into a five-star hotel and trade center complex in 2007.

But city officials had condoned misconduct in the execution of the plan, said the Government Inspectorate.

Inspectors said HCMC 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, whose units were renting the land lot.

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

After two months, the companies under the trade ministry sold 80 percent of their shares at Lavenue to two private companies, Hoa Thang Nam and Kinh Do Investment Company.

In June 2011, Lavenue received the city government’s permission to develop a high end hotel at the lot, 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 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.

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", the 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.

According to inspectors, land prices on Le Duan Street in the downtown area have climbed to more than VND400 million ($17,200) per square meter and if the lot is auctioned, the city can earn more than VND2 trillion ($85.8 million), instead of the VND700 billion ($30.6 million) it had received.