Vietnam’s police on Saturday arrested and launched legal proceedings against two former ministers of information and communications for their wrongdoings in a notorious acquisition deal between a leading mobile network operator and a pay TV provider in 2015.

The procedural decisions for Nguyen Bac Son, Minister of Information and Communication in the 2011-16 tenure, and his successor, Truong Minh Tuan, who led the ministry in the 2016-21 period, were approved by the Supreme People's Procuracy in accordance with the provisions of law.

They are being held in detention and probed for violations and wrongdoings committed when Son was the information minister and Tuan was his deputy, regarding the VND8,889 billion (US$392 million) deal offered by state-owned mobile carrier Mobifone to acquire a 95 percent stake in local pay TV operator AVG in late 2015.

Son was previously stripped of his membership in the Central Party Committee and his post as secretary of the Party Civil Affairs Committee of the Ministry of Information and Communications for the 2011-2016 term, while Tuan also received warning and removal from the same committee for the 2016-2021 tenure.

Tuan was also suspended as Minister of Information and Communications, following an order by the then state president in late July, and was replaced by the now minister Nguyen Manh Hung.

Police search the house of former Minister of Information and Communications Truong Minh Tuan in Hanoi. Photo: Danh Trong / Tuoi Tre

The Investigation Police Agency (C46) under the Ministry of Public Security launched criminal proceedings against law violations relating to the scandalous Mobifone-AVG deal on July 10, 2018, as the acquisition resulted in massive losses of state assets.

Mobifone is at the center of the investigation, as police initiated a criminal case on suspected violation of regulations on the management and use of public capital that lead to serious consequences of the mobile carrier, managed by the Ministry of Information and Communications, and related agencies.

In July last year C46 also began legal proceeding against and ordered the arrest of Le Nam Tra, former chairman of Mobifone’s Member Council, who is currently an official of the information ministry’s Office, and Pham Dinh Trong, director of the ministry’s Department of Enterprise Management.

Both Tra and Trong are charged with breaching regulations on the management and use of public capital that lead to serious consequences and face up to 20 years in prison, according to the Vietnam News Agency.

Serious violations

According to the Vietnamese government inspectorate, Mobifone was irresponsible and broke regulations in the AVG acquisition, especially in assessing the pay TV company's financial situation, leading to state budget losses of VND7 trillion ($308 million), and affecting Mobifone’s finance, resulting in difficulties for the company’s privatization process.

The Mobifone-AVG deal was proposed when the latter company was bogged down with debts valued at VND1.266 trillion (US$55.77 million) and accumulated losses of VND1.632 trillion ($71.89 million), according to a probe by the state inspectorate.

AVG’s total assets were worth only VND206 billion ($9.07 million), while Mobifone’s offer was VND8.889 trillion (US$392 million).

Mobifone was dishonest in reporting AVG’s financial situation to the information ministry during the acquisition, with the government inspectorate concluding that the assessment violated regulations for investment and managing and using state capital.

Police search the house of former Minister of Information and Communications Nguyen Bac Son in Hanoi. Photo: Vu Tuan / Tuoi Tre

The state inspectors stated that the responsibility for the wrongdoings went to the board of members, board of directors, the chief accountant and other departments of Mobifone.

In the meantime, the Ministry of Information and Communications, as the representative of the state ownership and the state agency in charge of management of information and communication, showed a lack of responsibility in assessing the acquisition.

Its approval of the acquisition had violated legal rules, causing serious losses of state capital and thus must be annulled, the state inspectorate said. 

In addition, while the acquisition was not eligible for being classified as a state secret, the ministry asked the Ministry of Public Security to include it in the list of classified information, which violated laws on issuing regulations on the publishing of information of State-owned one-member limited liability companies. 

Prior to the state inspectorate’s announcement, Mobifone and AVG decided to cancel the transfer of 344.66 million shares and refund each other the amount received under the agreement.

AVG shareholders will refund the entire amount paid by Mobifone, while Mobifone will return to AVG the number of shares and assets transferred.

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