Mobifone’s former director and deputy director have been arrested for wrongdoings over the loss-making purchase of the Audio Visual Global JSC (AVG).
The investigation over the AVG purchase is being expanded after the Government Inspectorate’s proposal to prosecute those who are involved in the purchase was approved in July in accordance with the anti-corruption directives.
The Ministry of Public Security announced that the investigators had found evidence and arrested Cao Duy Hai, former director of Mobifone, for violating regulations on the management and use of state capital.
Pham Thi Phuong Anh, former deputy director of Mobifone, was also arrested.
In August 2016, the Government Inspectorate was asked to investigate the acquisition of AVG by Mobifone and announced that they had found many violations. Mobifone and AVG agreed to cancel the deal and refund the amount received in the VND8.89trn (USD395m) failed acquisition. The deadline was over but Mobifone had only paid 95% of the acquisition.
AVG has faced continued difficulties since it was established. In 2015, it accumulated a loss of more than VND1.6trn (USD70m), 45% of its charter capital. When proposing to buy 95% of AVG’s shares, Mobifone omitted the financial difficulties and failed to follow the bidding procedures in choosing consultants for the case.
It was concluded that Mobifone, the Ministry of Information and Communication, and related agencies had committed many violations in assessing AVG’s financial situation and choosing consultants, allegedly leading to state budget losses of VND7trn (USD308m).
On August 21, the Ministry of Information and Communication announced that Cao Duy Hai had been fired over the violations. Pham Thi Phuong Anh was reprimanded in the same months for being irresponsible by the Party Committee of the Centrally-run Businesses’ Sector.