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Foreign investors uneasy with oil manufacturer’s functioning
Two foreign-owned investment funds have sold off their stakes in a vegetable oil maker, claiming the firm’s chairman did not function transparently, jeopardizing profitability.
Tuong An Vegetable Oil Joint Stock Co. (TAC) became the most active stock by volume in Ho Chi Minh City last Tuesday, with more than one million shares exchanging hands. Of this, 816,260 shares were sold by foreign investors.
UK’s Amersham Industries Ltd. sold 231,140 shares to reduce its stake from 5.93 percent to 4.71 percent on July 11. The UK-based fund sold all of its holding last month, according to a source from the company.
France’s Jaccar Capital Fund made a similar pattern, selling 219,760 shares to cut its stake from 6.01 percent to 4.85 percent in August.
Shares of Tuong An Vegetable Oil Joint Stock Co. Monday closed down VND1,800, or 4.85 percent, to VND35,300.
Conflicts over the firm’s management began early last year and involved The National Company for Vegetable Oils, Aromas and Cosmetics of Vietnam, known as Vocarimex, which holds 51 percent in the firm on behalf of the State.
Jaccar’s country chief Vo Thi Huyen Lan explained: “The firm’s general director should have been in charge of choosing the bidder for sourcing materials. But the company’s chairman Doan Tan Nghiep, who is also Vocarimex’s deputy general director, often brandished his authority to ask bidders to fax their price lists directly to him. As the result, Vocarimex became the supplier to Tuong An all the time.”
Tuong An has two other directors who are also officials of Vocarimex. General director Huynh Tuan Phuong Mai, who often opposed the chairman’s decisions, was finally replaced after a decision at a shareholder’s meeting last June. “Tuong An has the potential,”
Jaccar’s investment manager Khong Van Minh told Thanh Nien Daily. “But with management by directors who also work for Vocarimex, its earning capability is limited and its transparency has become low.
“There are many better-run companies inviting us to become their strategic partner. So goodbye Tuong An.”
Thanh Nien Daily’s efforts to contact Nghiep for comments were in vain. Tuong An’s net profit for the April-June quarter plunged 90.6 percent year-on-year to VND5.15 billion (US$310,240) while net profit for the first half fell 11.8 percent to VND60.7 billion.
Tuong An has one foreign partner remaining –Korea’s KITMC Worldwide Vietnam RSP Balanced Fund.
Thanhnien
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