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Would-be Miss World sponsor may have acquired Tien Giang Tourism Co. illegally   2010-05-24 - VNExpress

The VNExpress newswire provides more information about the equitization scandal in Tien Giang province. According to VNE, the authorities’ conclusion that Hoang Kieu and his family legally acquired the Tien Giang Tourism Joint Stock Company for a fraction of its value is, in fact, dubious.




Information about the RAAS Group, chaired by Hoang Kieu on website kieuhoang.infor, snapped on May 17 2010 by VNExpress.


In 2004-2005, the state-owned Tien Giang Tourism Company was ‘equitized’ as the Tien Giang Tourism JS Company. Four years later, the State sold its 51 percent share in this company through two auctions.


By March 2009, 94 percent of the company belonged to the family of Vietnamese-American investor Hoang Kieu. Thirty-four percent of the shares were registered in the name of his wife, Dao Thi Lan Phuong and thirty percent each as belonging to Hoang Kieu and his son, Hoang Sammy Hung.


It is suspected that the results of both auctions involved collusion among the bidders.


According to VNExpress, in the first auction of 21 percent of shares in August 2006, Hoang Kieu won the auction by bidding only 100 dong per share higher than the only other bidder, the Tong Linh Giang JS company. He offered 45,200 dong per share while Tong Linh Giang offered 45,100 dong per share. Tong Linh Giang’s vice chairman is Hoang Huu Hach, Hoang Kieu’s aunt, reports VNE.


The Tong Linh Giang Company was licenced in February 2005 with 12 billion dong of capital and an address in HCM City’s District 12.  Hach is one of three shareholders, holding 11 percent of its shares.


On his website,, Hoang Kieu lists Bamboo or Tong Linh Giang as members of his US-based RAAS group. [When VNNB checked this site, it was ‘down for maintenance’ (bảo trì). We did find a Facebook page mainly in English, ‘Hoang Kieu’s charitable activity’:]


When Hoang Kieu proposed to move the Miss World 2010 pageant from Khanh Hoa to Tien Giang, he represented himself as the chairman of RAAS group and chairman of Tien Giang Tourism JS Company. The relationship described between RAAS and Tong Linh Giang and the kinship of Hoang Kieu and Hoang Huu Hach prompts suspicion of collusion among the bidders.


Also according to VNE, when the State Capital Investment Corporation (SCIC) commissioned the An Binh Securities Trading Co. to auction the remaining 210,000 state-owned shares (30 percent) of the Tien Giang Tourism JS Company on March 10, 2009, An Binh’s bulletin revealed that Hoang Kieu, an American citizen, already owned 30 percent of the company’s shares.


The list of eight bidders included the name of Hoang Sammy Hung, American citizen. Since 2005, foreign investors have been allowed to hold up to 49 percent of the shares in Vietnamese public companies. Thus, as a foreign investor, Hoang Sammy Hung could buy no more than 19 percent of the Tien Giang Tourism JS Company’s shares.


However, SCIC and An Binh Securities Trading Company still recognised the auction result, declaring Hoang Sammy Hung the successful bidder on 30 percent of shares. According to records of the auction, seven of the eight bidders made the same offer, the minimum 31,000 dong per share, and Hoang Sammy Hung bid 36,000 dong per share.


After that, Hoang Kieu’s family bought the remaining six percent of the shares to own 100 percent of Tien Giang Tourism by early 2010.



The Thoi Son tourist site, which is managed by Tien Giang Tourism JS Company.


Dr. Le Tham Duong, head of the Business Administration Faculty at the HCM City Banking University, comments that “the restriction on the percentage of shares foreign investors may hold in public companies is basic knowledge. I don’t understand why the An Binh Securities Trading Company made this elementary mistake. Perhaps there are mysteries that need to be made clear.”


Lawyer Le Thanh Kinh, chief of the Le Nguyen Law Office, considers that this violation renders the auction on March 10, 2009 invalid. It ought to be reorganised, he said, and the authorities should consider disciplining the auction organisers.


At An Binh Securities Trading Company, the chief of its Enterprise Finance Department, Le Phuong Thanh told VNE that the firm could not comment yet because “We are making a report to the SCIC.”


On 14 May, SCIC General Director Le Song Lai told the press that SCIC would make an announcement as soon as it clarified five matters: the legal status of Hoang Kieu and Hoang Sammy Hung, the percentage of shares owned by foreign investors in the Tien Giang Tourism JS Company, whether the firm is a public company or not, the management of the second auction (because seven of the eight bidders offered the floor price) and the valuation of Tien Giang Tourism’s company’s fixed assets, that is, land areas managed by this firm.


On May 15, SCIC announced its conclusion that the auction of Tien Giang Tourism’s state-owned shares through the An Binh Securities Trading Company was legal and open. SCIC stressed that the Tien Giang Tourism JS Company is not a public firm listed on a stock exchange, so its foreign investors didn’t violate the law restricting their ownership of local companies.


Lawyer Kinh calls the SCIC’s explanation “unconvincing” because, he says, the auction of Tien Giang Tourism JS Company must conform to Decision 36 on the purchase of shares and contribution of capital in Vietnamese enterprises. This decision allowed foreign investors to hold up to 30 percent of the chartered capital of Vietnamese companies (subsequently raised to 49 percent) and was in force until August 15, 2009 (when it was replaced by Decision 88). The second auction took place in March 2009, so selling the remaining 19 percent of State shares to Hoang Sammy Hung was contrary to the law at that time.

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