Vietnam’s former industry minister under fire over son's promotions

By Toan Dao   June 15, 2016 | 11:42 am GMT+7

The Vietnam Association of Financial Investors (VAFI), a local non-profit organization, has questioned former Minister of Industry and Trade Vu Huy Hoang for a number of appointment decisions involving his son, one allegedly resulted in million dollar losses at a state-owned company.

Hoang was one of the cabinet members under former Prime Minister Nguyen Tan Dung’s government who stepped down in April this year. He was Minister of Industry and Trade for two tenures, from August 2007 to April 2016.

In a letter dated June 13 posted on its website on Tuesday, the VAFI asked the former minister to explain why he had appointed his son Vu Quang Hai to key positions at the Saigon Beer, Beverage and Alcohol Corporation (Sabeco), one of the biggest state-run beverage companies in Ho Chi Minh City.

Vu Quang Hai (L) receiving an appointment decision to become general manager of PVFI in 2011.

Vu Quang Hai (left) being appointed general manager of PVFI in 2011.

The VAFI said in 2015, Hai, 28, was appointed by the ministry to serve as a deputy general director and a member of the board of directors at Sabeco, representing the government’s interests in the company. According to the association, Hai’s track record at work proved he did not have the ability to fulfill the role or deserve the position at Sabeco, which has equity of more than VND12 trillion ($530 million).

In 2011, when Hai was 25 years old with no experience in business management, he was appointed general manager of PetroVietnam Trade Union Finance Investment Corporation (PVFI). State-owned PetroVietnam holds a 51 percent stake in PVFI, which has charter capital of more than VND300 billion ($13.2 million). PetroVietnam operates under the Ministry of Industry and Trade. During the two years under Hai’s management, PVFI incurred a total loss of more than VND220 billion, the VAFI said.

After that, Hai was transferred to the Ministry of Industry and Trade’s Trade Promotion Agency, leaving the PVFI on the edge of bankruptcy. After a year at the agency, Hoang’s son was appointed to a high position at Sabeco.

The VAFI said Sabeco carried out an initial public offering (IPO) eight years ago, but former minister Hoang delayed transferring the government’s ownership in Sabeco to the State Capital Investment Corp. and listing Sabeco on the stock market, enabling him to appoint his son and his secretary to senior positions at the company. The State Capital Investment Corp. is the government’s shareholder in state-run firms.

In its letter, the VAFI urged the former minister to ask his son to step down from his current position at Sabeco to pave the way for more capable people to replace him. The VAFI also called for Hai to take responsibility for the losses at PVFI when he was on duty there.

Vice Minister of Industry and Trade Ho Thi Kim Thoa, who directly appointed Hai to Sabeco, was asked to explain her decision. The VAFI said it raised the matter with the ministry more than a month ago, but has yet to receive a response.

According to the VAFI, the quality of personnel under Hoang’s 10-year term in the ministry resulted in the poor performance of many state-run companies. One of the typical examples is Trinh Xuan Thanh, vice chairman of Hau Giang Province People’s Committee. Prior to being assigned to his position in Hau Giang, Trinh Xuan Thanh was the chairman of PetroVietnam Corporation (PVC) from 2007 to 2013. In 2012, the company reported surprise losses of VND293 billion ($14 million). Despite the speculations surrounding Thanh’s responsibility for the losses at PVC, he continued to move up to more powerful positions.

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