A popular passenger bus operator in Ho Chi Minh City, whose massive bad debts were disclosed by a local bank earlier this week, fired back on Thursday, saying the lender has used misleading information to damage its reputation.

Construction Bank and Phuong Trang Corp, which owns Futa Bus Lines - the operator of numerous routes connecting Ho Chi Minh City with southern, south-central, and central Vietnam, have been at each other’s throats since the lender announced its plans to resolve their debt disputes in court.

The bank claimed on Wednesday that the bus operator owes a total of VND3 trillion (US$134 million) in nonperforming loans, borrowed through ten different lending applications.

Do Tat Kha, the bank’s deputy CEO, told Tuoi Tre (Youth) newspaper on Thursday that Futa Bus Lines has borrowed loans under the name of a group of subsidiaries called Phuong Trang Group, resulting in the true value of the company’s debt calculated at more than VND9.4 trillion ($419.64 million).

The loans were disbursed by Construction Bank’s predecessor, TrustBank, and do not include fines from overdue debts since 2011, Kha added.

Construction Bank only decided to bring the debtor to court over a VND3 trillion debt, instead of the full VND9.4 trillion, as this part of the debts is secured with strong collateral assets, he explained.

Phuong Trang Group consists of the passenger bus, taxi, and express delivery arms of its parent firm, Phuong Trang Corporation, according to sources.

The group values their mortgaged assets at more than VND14 trillion ($625 million), while an independent auditor says the real value is only about VND7.2 trillion ($321.43 million), according to the Construction Bank deputy CEO.

All of the details stated by Construction Bank regarding the debt dispute have been denied by Phuong Trang Corporation.

Pham Dang Quan, deputy chairman of Phuong Trang Corporation, told Tuoi Tre that Phuong Trang Group’s real debts with Construction Bank are approximately VND3.4 trillion, not the nearly VND10 trillion the lender claims.

A report by the Ho Chi Minh City branch of the State Bank of Vietnam shows that the group only claims a total debt of VND3.43 trillion ($153.13 million) through 47 different loans.

In a separate report into Construction Bank on March, the investigative police unit under the Ministry of Public Security also confirmed that of the VND9.43 trillion unpaid debts of the lender, Phuong Trang Group accounted for only VND3.43 trillion. The remaining debts belong to another conglomerate.

“Of the VND3.4 trillion debt Phuong Trang Group owes Construction Bank, Futa Bus Lines is only liable for VND36 billion [$1.61 million],” Quan said.

“Therefore, the bank's announcement that Futa Bus Lines owes it more than VND3.4 trillion is inaccurate.”

The lender has previously rejected a 2012 suggestion from Phuong Trang Corp. to use its savings book as collateral for the loans, Quan said.

Quan asserted that the company’s mortgaged assets are worth as much as VND14 trillion.

Since 2012, Phuong Trang Corp. has repeatedly filed complaints as well as denouncements that some of the former Construct Bank executives had embezzled assets from the bank, Quan said.

“Their refusal to handle our collateral assets has also caused us economic damage and ruined our reputation,” Quan said. 

“Since these issues have yet to be resolved, the bank has continued to hurt us by releasing false information regarding our debts.”

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