Police in southern Tra Vinh Province have detained Nguyen Huu Loc, ex-chairman of Seaprodex, one of the country’s leading seafood exporters, for his deliberate violations of economic management regulations. Loc was chairman of Vietnam National Seaproducts Corporation (Seaprodex), Seaproducts Mechanical Shareholdings Company (Seameco), Bien Dong Seafood Company and and Cuu Long Aquafeed Joint Stock Company. He was also a member of Bien Tay Seafood Company’s management board.   Also arrested yesterday was Tran Vu Dung, former director of Bien Tay Joint Stock Company, a subsidiary of Seaprodex. The two men have been charged with “intentional acts against the State’s economic management regulations and causing serious consequences,” police said. According to investigators, the two defendants counterfeited financial statements to turn the actual losses into profits and signed false material procurement contracts to appropriate money from the state budget, among other offenses. According to a report by Seaprodex submitted to the Ministry of Agriculture and Rural Development in September 2012, the management board of Bien Dong Seafood Company  in June 2007 established Aquafeed Cuu Long Joint Stock Company in the Long Duc Industrial Park in Tra Vinh, with a charter capital of VND1.5 billion (US$72,000). In 2008, Bien Dong increased the capital to VND2.1 billion.Making false contracts, selling shares  In 2012, Aquafeed Cuu Long was inspected by the ministry, which confirmed that the Seameco, represented by Dung, had invested more than VND7.2 billion into Aquafeed Cuu Long. Investigators have discovered abnormal acts by Dung and Loc in relation to transferring money from Seameco as investments to Aquafeed Cuu Long and Bien Tay Joint Stock Company, which was set up in 2007. The transfers were made based on bogus contracts for the sale of fish feed prepared by Dung and Loc and signed between the three entities, investigators said. Meanwhile, Loc offered to sell 900,000 shares of Seameco with a nominal value of VND10,000 per share at his own discretion, reducing the State’s stake in Seameco from 59 percent to 49 percent, thereby undermining the controlling role of the State in the company’s operations. Under applicable regulations, Loc was obliged to ask for approval from the board before selling such shares, but he failed to do so, investigators said. In fact, Loc directly controlled all operations of Seameco and Aquafeed Cuu Long, which has fallen deep into debt since January 2012, Bui Thi Tuyet Mai, general director of Seameco, said in a relevant report. Since its establishment, Aquafeed Cuu Long has not sent any reports on operating results to Mai, she said.Insolvency Meanwhile, a January 2012 report from Nguyen Van Tan, who represented the State’s stake in Seameco, said “the financial situation is seriously imbalanced, with the payable debts much larger than the company’s assets. Meanwhile, the company faces difficulties in recovering debts from its debtors, and has even failed to recover them.” Tan also reported that “Aquafeed Cuu Long owed VND100 billion ($4.8 million) to the bank, VND115 billion (including interest) to Seameco, and VND7 billion to other companies.” Meanwhile, the total amount of Aquafeed Cuu Long’s assets and receivable debts was VND150-160 billion. From mid 2011, Aquafeed Cuu Long has had no money to buy materials, and most of its workers have are underemployed or have nothing to do. In addition, the company has not paid workers salary for several months, and owes about VND1 billion to the social insurance agency. The police are continuing to investigate the offenses committed by Loc and Dung.