Ho Chi Minh City police on Wednesday arrested Tat Thanh Cang, former standing deputy secretary of the municipal Party Committee, over allegations of his wrongdoing in a state-run company’s sale of nine million shares to a private firm in 2017.
Cang, 49, faces charges of “breaching regulations on the management and use of state assests, which caused waste and losses,” investigators said.
Police searched his house and workplace the same day, following approval by the municipal People’s Procuracy.
The Ho Chi Minh City People’s Council, which is the grassroots equivalent of the legislature, had suspended his membership for the 2016-21 tenure.
|Tat Thanh Cang, former standing deputy secretary of the Ho Chi Minh City Party Committee, reads his arrest warrant on December 16, 2020. Photo: A.X.|
Cang is accused of committing violations in state-run South Saigon Development Corporation (SADECO)’s sale of nine million shares to privately-owned Nguyen Kim Company in 2017, a source told Tuoi Tre (Youth) newspaper said.
SADECO’s shareholders include the Office of the Ho Chi Minh City Party Committee, some state-owned firms, and other organizations. Nguyen Kim is a strategic partner of SADECO.
The Office of the Ho Chi Minh City Party Committee and the state-owned companies assigned people to represent the state to take on executive positions at SADECO.
In 2017, SADECO sold the nine million shares to Nguyen Kim for VND360 billion (US$15.5 million), pursuant to a request to increase the state-run corporation’s capital.
This share sale involved the state representatives at SADECO.
SADECO then put all revenue from the deal into banks to earn interest.
|Tat Thanh Cang, former standing deputy secretary of the Ho Chi Minh City Party Committee, signs his arrest warrant on December 16, 2020. Photo: A.X.|
In 2018, Ho Chi Minh City inspectors found that it was not neccesary for SADECO to raise its capital at that time.
The company’s pricing its shares cheaply at VND40,000 ($1.73) apiece then could have caused losses for the state.
Nguyen Kim managed to acquire SADECO after buying the nine million shares, holding 34.6 percent of the state company.
SADECO’s business went very well at the time of the share sale, with a dividend yield of 20 percent in 2015, 40 percent in 2016, and 10 percent in 2017.
The state’s holdings in SADECO plummeted in the wake of the sale.
A total of 20 people, including Cang, have been probed in association with this case.