Lottery firms in southern Vietnam found with massive non-core investment
By the end of 2015, these 11 companies had earmarked more than VND1,078 billion ($48.13 million) for long-term financial investment, though only over VND80.8 billion ($3.61 million) was meant for their core business operations, the finance inspectors said.
The combined non-core investment of these companies amounts to VND997 billion ($44.51 million), according to the inspectors tasked with examining the 2015 consolidated financial reports from the lottery firms.
The finance ministry also noted that plans to increase the registered capital of the 11 companies by a total of VND4,137 billion ($184.69 million) are inappropriate and should therefore be carefully vetted.
The companies had either asked to increase chartered capital more than they should, lacked convincing reasons for needing more capital, or intended to put the extra capital into non-core business ventures, according to inspectors.
The finance ministry asked seven of the lottery companies to pay back a combined VND1,448 billion ($64.64 million) to the state budget for submitting improper capital increase plans, and VND431 billion ($19.24 million) for unpaid taxes and fees.
The ministry inspectorate also demanded that the lottery companies withdraw from their non-core ventures in the near future, though the firms say the divestment process may take some time.
The Tien Giang lottery firm, for instance, has invested a total of VND453 billion ($20.22 million) into different entities operating in the finance, water supply, and tourism sectors and says it can only withdraw from these non-core investments by 2020.
Company director Ly Minh An said the investments were made before Vietnam banned lottery companies from investing outside their core business, adding that the company is speeding up its divestment processes.
Nguyen Hoang Hai, general secretary of the Vietnam Association of Financial Investors, said the nearly VND1 trillion of non-core investments would have been of better used if they had been channeled into education or healthcare.
Hai said the companies should be forced to withdraw from risky sectors, such as banking and finance, as “many provinces are still in need of money for social welfare projects.”
“If the non-core investment withdrawals come with losses, we should also find and sanction the individuals responsible for those investment decisions,” he said.
