Wednesday, June 27, 2012
Vietnam's shipping line over $2 bil in debt; former chairman still on the run
Vietnam's state-run shipping line is $2.1 billion in the red while its former chairman remains the subject of an international manhunt, as charges of gross mis-management and cronyism abound.
The financial fiasco of Vietnam Shipping Lines, or Vinalines, has put the spotlight on the Southeast Asian country's mysterious state-owned firms.
"These companies have operated in secrecy for too long but that must come to an end," said Jonathan Pincus, dean of the Fulbright Economics Teaching Program in Ho Chi Minh City to Reuters.
Two years ago, the state-operated shipbuilder, Vinashin, accumulated $4.5 billion in debt in a scandal where nine of the company's executives were sent to prison.
Duong Chi Dung, the former chairman of Vinalines, reportedly faces a similar fate and has been the subject of a manhunt since May that now has Interpol involved.
Four other former top Vinalines executives have since been arrested.
One of the centerpieces to the Vinalines scandal featured prominently in the Vietnamese media is what is referred to as the "iron heap" or the 43-year-old floating dock the shipping group purchased from a company in Singapore for $9 million that reportedly cost over $26 billion to repair – 70 percent of what a new dock would cost.
Dung took over the helm of Vinalines in 2005 and the company's ranks grew to 18,000 workers, while the firm reportedly defaulted on $1.1 billion worth of loans in addition to acquiring 73 mostly secondhand foreign vessels, of which 17 were too old for service and too costly to repair.
For the full Reuters story: in.reuters.com
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