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Handico family: business losses, behind schedule, budget debt tens of billions

Handico family: business losses, behind schedule, budget debt tens of billions

The Ministry of Finance’s inspection investigation revealed a series of dark spots in the financial picture – production and business of a group of companies under the Hanoi Housing Development and Investment Corporation.

The Inspectorate of the Ministry of Finance has just issued a conclusion on inspecting the observance of the laws on finance, accounting and taxation at the Hanoi Housing Development and Investment Corporation (Handico) and enterprises with investment capital from Handico. .

The six inspected enterprises were: the parent company – Hanoi Housing Development and Investment Corporation, Hanoi Housing Investment and Development Joint Stock Company No. 68, Housing Development and Urban Development Joint Stock Company Ha Noi Housing Development and Investment JSC, Hanoi Housing Service Trading Company Limited, Hanoi Urban Development Investment Consultant Joint Stock Company.

Handico family: business losses, behind schedule, budget debt tens of billions
Handico family: business losses, behind schedule, budget debt tens of billions

Business losses, not preserve capital

One of the notable points about capital management of the Handico Group is the status of the owner has not contributed enough capital as the certificate of business registration.

Specifically, according to the inspection, 2/6 companies have not increased charter capital, including: parent company (capital contribution of owners is smaller than the charter capital as of December 31, 2016 is VND 224 billion) and Hanoi Housing Service Business One Member Limited Company (the equity of the owner is less than the chartered capital as of December 31, 2016 is VND106 billion)

According to Handico’s explanation, the two companies are 100% owned by state-owned enterprises, so the capital increase will be carried out by the owner in 3 years, and the capital increase will be determined from the profit after tax. Therefore, the capital increase depends on the business results of each unit.

Regarding the production and business results of each unit, the inspection concluded that there are 2 companies invested by parent company in production and business losses or accumulated loss should not preserve and develop capital; be possible risk of financial security.

Specifically, Hanoi Housing Investment and Development Joint Stock Company No. 68 had accumulated loss of VND49 billion (as at December 31, 2016) and Hanoi Housing and Urban Development Joint Stock Company Accumulated losses of VND6.6 billion.

Hundreds of billable debts

Financial statements of 6 enterprises inspected at December 31, 2016 stated total receivable is VND1,578 billion. Of which, short-term receivables are VND 1,573 billion, long-term receivables are VND 5.7 billion.

Through the inspection, the Ministry of Finance found that all 6 enterprises have not yet met the full debt. The amount of receivables that have not been reconciled as of December 31, 2016is VND1,157 billion, accounting for 67.02% of total receivables.

Five out of six enterprises have overdue receivables of up to VND 241 billion, accounting for 13.98% of receivables. Specifically, the parent company has VND3.7 billion(accounting for 07% of receivable debt), Hanoi Housing Investment and Development Corporation No. 68 has December 31, 201632.7 billion (accounting for 6%), Limited Liability Company MTV Housing Services JSC has VND22.6 billion (4.2%), Hanoi Housing and Urban Development Joint Stock Company has VND144 billion (26.5%) and the Company The stock of housing development and development in Hanoi is VND37.8 billion (accounting for 7%).

Regarding debts, the inspection concluded that all 6 enterprises have not fully reflected the liabilities. The amount not yet fully calculated as at December 31, 2016 is VND1,143 billion (accounting for 18% of total liabilities).

Five out of six inspected enterprises had overdue debts totaling VND41 billion (representing 0.7% of total liabilities), including VND13.3 billion (accounting for 3.3% , Hanoi Housing Investment and Development JSC., 68 VND 19.7 billion (accounting for 24%), Ha Noi Housing Services Business Co., Ltd. VND 4.9 billion (accounting for 13.7%). , Hanoi Housing Development and Construction Company VND 2.5 billion (5.2%), Hanoi Urban Development and Investment Consultancy JSC VND 497 billion (17%).

The parent company’s portfolio consists of six companies

According to the conclusions, as at December 31, 2016, the parent company has 655 billion VND of long-term financial investment in 38 companies, including 3 subsidiaries, 18 joint venture companies and 17 other  companies.

Of the 18 joint ventures, there are 4 loss-making units in 2016 with the amount of 5.9 billion dong, including: Hanoi Construction Investment Joint Stock Company No. 17 (loss) VND 273 million, accumulated loss of VND 838 million), Ha Noi Housing Development and Construction Joint Stock Company (VND 256 million loss, VND 1.4 billion loss), Construction Joint Stock Company Hanoi Development House No. 15 (loss of VND2.7 billion, accumulated loss of VND2.7 billion).

In 17 other companies, there are 2 business units with losses in 2016 with a loss of VND235 billion, the accumulated loss to 31/12/2016 is VND1,431 billion, including: Business and Construction Joint Stock Company (VND10.3 billion loss, VND10.3 billion loss), Handico Financial Joint Stock Company (loss of VND224 billion, accumulated loss of VND1.40 billion).

A number of projects are behind schedule

Inspection concludes that the parent company has a series of slow-track projects such as low-income housing projects in plots CT3, CT4, CT5 of Kim Chung new urban area (Kim Chung commune, Dong Anh district, Hanoi), Tran Phu X2 project.

Hanoi Housing Development and Training Joint Stock Company has a 6-year delayed office building project combining HH3 services. Ha Noi Housing and Urban Development Joint Stock Company has nine projects that are behind schedule, of which the North Dai Kim project has been delayed to 12 years, and the new urban area is 8 years old.

Accounting for shortage of turnover, wrong accounting of expenses, accounting for profit

According to inspection conclusions, there are 2/6 of enterprises accounting revenue and incomes in the amount of VND 8.2 billion, including: parent company (accounting for shortage of production revenue and financial income of VND 4.7 billion) and Hanoi Housing and Urban Development Joint Stock Company (accounting for VND3.5 billion shortfall in construction activities).

Two out of six enterprises increased their cost by an amount of VND 3.9 billion, including: Hanoi Service Business One Member Co., Ltd. (accounted for not increase the cost of 60 apartments at project 3.10 No , Le Van Luong with VND 648 million) and Ha Noi Housing and Urban Development Joint Stock Company (improperly recorded cost of VND 3.3 billion).

Two out of six companies accounted for VND5.3 billion, including: Hanoi Housing Investment and Development Joint Stock Company 68 (missed interest payment payable to Agribank at 1.99 billion dong); Ha Noi Housing and Urban Development Joint Stock Company (accounting for the cost of construction and installation of the value of acceptance on the 12th – 13th payment slip with Uyen Khang Company VND3.3 billion).

There are 3/6 companies under-tax profit in 2016 with the amount of VND 4.7 billion, including: Hanoi One-member Business Services Limited Company (VND648 million), Trading Joint Stock Company housing development and urban Hanoi (VND3.7 billion), Housing Development and Housing Company Hanoi (VND379 million).

Delayed to pay tens of billion budget

The inspection concludes that the tax amount to be remitted into the state budget by December 31, 2016 of 6/6 inspected enterprises is VND 60.4 billion. By the time of inspection, the paid tax amount is VND 55.9 billion, the unpaid amount is VND 8.4 billion. In particular, the parent company has not paid VND279 million, House Investment and Development Corporation No. 68 has not paid VND8.1 billion.

Inspection results also confirmed that 6 out of 6 enterprises have made false declarations, leading to the lack of tax payable to the state budget of VND16.8 billion. Of which, VAT is VND12.4 billion, enterprise income tax is VND1.1 billion and the remaining profit is VND3.2 billion.

Request to pay VND16.8 billion to the account of the Ministry Inspectorate

With the above contents, the Inspectorate of the Ministry of Finance proposed the Board of Directors, General Director of Handico to direct the units to compare debt fully when making financial statements, resolutely recover receivable debts To raise the efficiency of the use of capital, strictly comply with the provisions on setting up the reserve for bad debts and the financial investment reserve.

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At the same time, to continue the investment capital withdrawal of the Corporation in enterprises according to the plan approved by the People’s Committee of Hanoi. For companies who are investors of the project, it is necessary to coordinate closely with the authorities to solve problems, accelerate the project progress.

The Ministry of Finance also requested enterprises to declare additional VAT of VND 12.4 billion and direct the units to adjust the cost accounting as stated above.

In addition, enterprises shall pay to the custody account of the Ministry of Finance a sum of VND 16.8 billion for remittance into the state budget. Of which, corporate income tax was VND1.1 billion, profit after tax was VND3.2 billion, VAT was VND12.4 billion.

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Handico family: business losses, behind schedule, budget debt tens of billions
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