Construction Corporation No. 1: A series of inefficient investments, loss of state capital

The audit report shows that a number of investments of Construction Corporation No. 1 in subsidiaries, joint ventures and other companies are ineffective and do not preserve the state capital.

Investments in subsidiaries and joint ventures have all suffered losses

The State Audit of Vietnam has recently issued a financial report on activities related to the management and use of state capital and assets in 2016 of Construction Corporation No. 1 – One Member Limited Company (now the Construction Corporation No. 1 – CTCP) “.

According to the report, as of the end of 10/2016, the parent company – Construction Corporation No. 1 has long-term investment VND1.152 billion (equal to 15.04% of total assets). In particular, investment in subsidiaries of VND406 billion, investment in joint ventures – associate VND679 billion, investment in other companies VND66.8 billion.

The Construction Corporation No. 1 – CTCP

Assessing the effectiveness of investments in subsidiaries, the State Audit said that in the period January 1 – October 31, 2016, May 1 business companies lost more than VND15.7 billion (ie. Construction Joint Stock Company No. 1 – Viet Hung.

Up to October 1, 2016, May 2 companies have accumulated losses is Construction Corporation No. 1 – Viet Hung (loss of VND 14.9 billion / total investment capital 40 billion) and Company VINA-PSMC Precast Concrete Limited Company (VND7.6 billion loss / total investment of VND48 billion).

For investments in joint ventures – associates, the State Audit said that in the period 1/1 – 31/10/2016, there were 4/11 companies operating losses, including: Joint Stock Company Construction and Trading of Materials, Nhan Phuc Duc Investment Joint Stock Company, Construction Joint Stock Company No. 1 – Viet General, JSC Construction and Exploitation of building materials Central.

As of October 31, 2016, there were 5 loss-making companies, including: Construction and Material Trading Joint Stock Company (accumulative loss of VND 216.7 billion / total investment capital of VND 100 billion); Human Resources Investment Corporation (Accumulative loss of VND4.5 billion / investment capital of VND150 billion), Construction Joint Stock Company Number 1 – Vietnam Total (accumulated loss 49 billion VND / total investment capital VND6.8 billion), Bien Hoa Concrete Construction and Material Exploitation Joint Stock Company (accumulated loss VND46 billion / total investment VND16.6 billion), Bien Hoa Concrete Joint Stock Company Accumulated loss of VND 73.3 billion / total investment capital of VND 45 billion.

In addition, there are 1 inactive company is Lenex Joint Venture Company with total investment capital of VND 12.6 billion. It is known that this company has suffered losses, stopped operating in 2012 and Construction Corporation No. 1 has reduced the total value of investment when officially converted into a joint stock company.

As for investments in 4 other units, the State Audit said that 2016 had 1 business company suffered losses such as Tan Lo BT Investment Limited Company (BT project enterprises are implementing The accumulated loss to October 31, 2016 is VND 62.6 billion / investment capital VND 174.7 billion.

Not preserve the state capital

Assessment of financial status, efficiency of investment activities of the parent company – Construction Corporation No. 1 in 4 associated companies were selected auditors, the State Audit said that there are 2 units that General Corporation You do not preserve the state capital.

One is JSC Construction and Material Business (capital contribution of the Corporation accounting for 36.17% of charter capital). As of December 31, 2016, the company’s accumulated loss was VND411.8 billion, equity was negative at VND210.6 billion.

Secondly, Bien Hoa Concrete Joint Stock Company (40.92% of charter capital). As of 31/12/2016, the company’s accumulated losses were VND75.2 billion, negative equity was VND27.4 billion. If the full provisions for short-term receivables under Circular 228/2009 of the Ministry of Finance, the accumulated losses increased VND19.7 billion and negative equity is VND47.15 billion.

Evaluation of the long-term investment performance of subsidiaries, the State Auditor said at Construction Company No. 1 – Viet Hung, as of October 31, 2016, the investment unit Two projects worth VND 5.9 billion. In that one company has not yet come into operation, one company has suffered losses. Tendency, financial investment activities are not effective.

At No. 1 Construction Joint Stock Company – Viet Quang, up to 31/10/2016, the unit made investment in 3 companies with a total investment capital of VND 2.47 billion. In particular, there are 2 companies with business loss results (Joint Stock Company Construction No. 1 – Viet Hung and Joint Stock Company Human Phuc Duc). In short, the efficiency of financial investment is not high.

You are reading the article Construction Corporation No. 1: A series of inefficient investments, loss of state capital in the Real Estate category at https://realestatevietnam.com.vn/. Any information sharing, feedback please contact through Hotline (+84) 898 898 688 (24/7) or email to contact.vietnamrealestate@gmail.com.
Special thanks!