The owners of a foreign direct investment (FDI) steel firm in southern Vietnam have fled the country after incurring insurmountable debts totaling VND100 billion (US$4.46 million).
Quatron Steel JSC was licensed to run a steel manufacturing complex in My Xuan B1 Industrial Zone in Tan Thanh District, Ba Ria-Vung Tau Province in 2008, funded entirely by foreign capital.
The company’s six founders were all foreigners from Jordan, Greece and Canada.
According to investigations by Tuoi Tre (Youth) newspaper, the company has been caught up in losses since 2014 and unable to pay workers’ wages or social insurance.
As of February 2017, Quatron Steel has been indebted to 20 of its business partners by over VND11 billion ($491,000), while also owing over VND2.7 billion ($120,000) in wages and a further VND15 billion ($670,000) in social insurance it is expected to pay for nearly 400 workers.
The company has also been found to have unpaid taxes and overdue bank loans total more than VND1.2 billion ($53,000).
Its 80,000-square-meter factory complex had been mortgaged to a local branch of the Bank for Investment and Development of Vietnam (BIDV) to obtain a loan of around $3 million.
In total, Quatron Steel’s debts amount to over VND100 billion ($4.46 million) while its mortgaged properties are valued at around VND60 billion ($2.68 million), according to Tan Thanh’s Civil Judgment Execution Division.
Authorities have not been able to make contact with the company’s CEO or chairman since mid-2016, as the foreign nationals had allegedly fled Vietnam.
Nguyen Phi Hung, a labor official at Ba Ria-Vung Tau’s Department of Labor, War Invalids and Social Affairs, said it is “extremely challenging” to safeguard the rights of the company’s laborers now that their employers are no longer within Vietnam’s jurisdiction.
An inspection carried out last year on Quatron Steel by the provincial industrial zone watchdog found that the company could only provide vague authorization papers of directorship.
The firm later requested that future inspections be postponed until a new CEO was appointed.
“When authorities got wind of the losses at Quatron, its owners were already abroad and were directing the company’s operations via an invalid representative,” said Nguyen Anh Triet, head of Ba Ria-Vung Tau’s Management Authority for Industrial Zones. “Therefore, we couldn’t impose a travel restriction to prevent them from fleeing the country.”
The company’s mortgaged assets will be sold at market prices, the money from which will be used to pay outstanding wages to Quatron’s workers, according to Nguyen Duy Hong, deputy chairman of the provincial Department of Labor, War Invalids and Social Affairs.