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Cotton company faces probe
The Ho Chi Minh City administration has ordered an inspection of Bach Tuyet Cotton Joint Stock Company’s books after the cotton product maker’s major shareholder complained about its financial reporting.
Gia Dinh Textile and Garment Co., which holds a 30 percent stake in Bach Tuyet on behalf of the HCMC government, advised the municipal government the cotton products company had broken a range of financial regulations.
Gia Dinh Textile and Garment Co. also said the administration and human resources manager at the cotton company had misappropriated company money to buy land.
Bach Tuyet makes medical cotton products, including cotton-tipped applicators used in surgery.
In a telephone interview with Bloomberg on Monday, Bach Tuyet General Director Ta Xuan Tho said the company would try to raise VND65 billion ($3.9 million) to repay some of its debts and resume production next month. Tho did not explain how funds will be raised to repay the debt.
Gia Dinh Company has now withdrawn its objection to Bach Tuyet’s planned share sale to pay overdue debts.
Bach Tuyet is on the verge of bankruptcy with debts of more than VND56 billion ($3.33 million), Tho said. The company ceased production on July 12.
Tho said Bach Tuyet will have to lay off half of its 500 employees to reduce production costs.
Trading of Bach Tuyet shares on the Ho Chi Minh Stock Exchange resumed on July 21 after a six-day suspension ordered by the stock market watchdog. The trading halt was called after Bach Tuyet released its earnings results for 2006 and 2007, showing it had made losses in both years.
Thanhnien
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