The acquisition is said to have caused nearly VND6.6 trillion ($284.4 million) in losses to the state budget.
Former Minister of Information and Communications Nguyen Bac Son is at Hanoi People's Court, December 16, 2019. Photo by VnExpress/Giang Huy.
The trial in the Hanoi People's Court will hear the case against 14 defendants, including former executives of state-owned telecom giant MobiFone and private pay TV firm Audio Visual Global (AVG), and is scheduled to continue through the weekend until December 31.
Son and Tuan are charged with "violating regulations on the management and use of public capital that led to serious consequences" and "taking bribes." Both were arrested in February and expelled from the Communist Party in October.
Son, information minister from 2011 to 2016, was retroactively dismissed from the position in October last year. Tuan, information minister from 2016, was suspended from his position in July last year and dismissed in a secret ballot by the legislative National Assembly three months later.
The indictment states that in 2015, MobiFone under the information ministry wanted to invest in the pay TV sector. Son promoted the acquisition of AVG and pushed for the deal to be done before his tenure was up.
After five rounds of negotiations, under Son's directions, AVG and MobiFone reached an agreement on October 2, 2015 for the latter to acquire a 95 percent stake in the former. Son and Tuan, the latter his deputy minister then, decided not to release information on the deal and suggested that this information be listed as a state secret.
Former Minister of Information and Communication Truong Minh Tuan arrives at Hanoi People's Court, December 16, 2019. Photo by VnExpress/Pham Du.
Investigators found that even though the price and the investment efficiency of the purchase had not been clarified by competent authorities, Son issued a directive on December 15, 2015, ordering that it is implemented immediately and completed before the end of the fiscal year 2015.
He subsequently instructed Tuan to sign a decision to approve the acquisition on December 21, 2015 without the prime minister’s approval, which was mandated in this investment decision.
MobiFone thus acquired a 95 percent stake at AVG for nearly VND8.9 trillion ($382.6 million), many times higher than AVG's real value, and delivered great benefit to the pay TV firm's then chairman Pham Nhat Vu and its shareholders.
Investigators found that in order for the acquisition deal to be approved in a way that benefits him, Vu gave bribes of $3 million to Son, $200,000 to Tuan, $2.5 million to MobiFone's former chairman Le Nam Tra and $500,000 to MobiFone's former general director Cao Duy Hai.
After discovering the violations, investigators assessed that Son, Tuan and several MobiFone leaders had directly caused losses of nearly VND6.6 trillion ($284.4 million) to the state. They calculated this by taking the VND8.5 trillion that MobiFone had already paid AVG, subtracting from it the actual value of the firm's remaining assets, VND1.97 trillion, and adding VND115 billion, which was the total value of the interest payments MobiFone had lost due to withdrawing money from term deposits before their maturity to make the purchase.
In 2018, Vu voluntarily returned nearly VND8.8 trillion to MobiFone, which included the original payment of VND8.5 trillion as well as the lost interest payments and other expenses.
Prosecutors have determined that Vu was not chiefly responsible for the losses to MobiFone caused by Son and his accomplices, noting that he had proactively offset all the losses incurred by the state.
The indictment states that nearly VND100 billion has been recovered in relation to the giving and taking of bribes in the case.
By the time of the trial, authorities have recovered nearly VND8.9 trillion, offsetting most losses caused by the illegal acquisition.
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