Vinashin could lose $1bn more
A state-owned shipbuilder whose debts have threatened Vietnam's global financial reputation could lose almost $1 billion more because of penalties on unfulfilled contracts, a report said , Fridaymalaysia.msn reports.
Government inspectors issued the warning after examining more than $4 billion in debts already accumulated by Vinashin (Vietnam Shipbuilding Industry Group), the Thanh Nien Weekly reported.
From 2006 to 2010 the conglomerate signed 85 contracts worth $2.84 billion but completed only 15 of them, or 18 percent, because of "general incompetence," Thanh Nien Weekly said, citing the inspectors' report.
Terminated contracts accounted for about 47 percent of the group's accumulated debt, but interest and fines compounded by the terminations could add another $974.7 million to Vinashin's unpaid bills, it said.
Government inspectors examined Vinashin and 19 affiliates between July and November last year.
They declined to release their findings to AFP.
Inspectors found 16 Vinashin managers responsible for the crisis but said most of the blame lay with former chairman Pham Thanh Binh, Thanh Nien said.
Binh allegedly authorised construction of a thermoelectric plant that the government had never approved, covered bank debts with international bonds, and used state money to play the stock market, Thanh Nien said.
Binh was arrested last August on a charge of violating state economic management regulations. Several other former executives have also reportedly been detained.
The inspectors called for seven separate criminal investigations to be launched into Vinashin and its subsidiaries, Thanh Nien said.
In December the company defaulted on the first $60 million instalment of a $600 million loan arranged by Credit Suisse in 2007.
The troubles sparked investor fears the scandal was symptomatic of wider problems at state-owned firms, a key part of the economy. Ratings agencies cited Vinashin's troubles in downgrading Vietnam's sovereign ratings last year.
Investor sentiment has since improved and Vietnam sovereign bonds are now trading significantly lower on the international market than in December, the World Bank says.
The government said no political leaders will be punished for the problems at Vinashin, and the company is being restructured.
Government inspectors issued the warning after examining more than $4 billion in debts already accumulated by Vinashin (Vietnam Shipbuilding Industry Group), the Thanh Nien Weekly reported.
From 2006 to 2010 the conglomerate signed 85 contracts worth $2.84 billion but completed only 15 of them, or 18 percent, because of "general incompetence," Thanh Nien Weekly said, citing the inspectors' report.
Terminated contracts accounted for about 47 percent of the group's accumulated debt, but interest and fines compounded by the terminations could add another $974.7 million to Vinashin's unpaid bills, it said.
Government inspectors examined Vinashin and 19 affiliates between July and November last year.
They declined to release their findings to AFP.
Inspectors found 16 Vinashin managers responsible for the crisis but said most of the blame lay with former chairman Pham Thanh Binh, Thanh Nien said.
Binh allegedly authorised construction of a thermoelectric plant that the government had never approved, covered bank debts with international bonds, and used state money to play the stock market, Thanh Nien said.
Binh was arrested last August on a charge of violating state economic management regulations. Several other former executives have also reportedly been detained.
The inspectors called for seven separate criminal investigations to be launched into Vinashin and its subsidiaries, Thanh Nien said.
In December the company defaulted on the first $60 million instalment of a $600 million loan arranged by Credit Suisse in 2007.
The troubles sparked investor fears the scandal was symptomatic of wider problems at state-owned firms, a key part of the economy. Ratings agencies cited Vinashin's troubles in downgrading Vietnam's sovereign ratings last year.
Investor sentiment has since improved and Vietnam sovereign bonds are now trading significantly lower on the international market than in December, the World Bank says.
The government said no political leaders will be punished for the problems at Vinashin, and the company is being restructured.
