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Lam Dong claims recall of villas from HAGL legitimate
Lam Dong Province’s Department of Finance has defended the province’s decision to recall 11 villas in Dalat earlier allocated to Hoang Anh Gia Lai Group (HAGL), saying these villas have been unused for years.
“HAGL has left the villas deteriorating and the State assets losing in value,” the department’s director Nguyen Van Yen told the Daily after HAGL sent a petition to the Lam Dong People’s Court accusing the department of violating a leasing contract for the villas signed by the group and the agency.
In the petition lodged on Monday, HAGL (HoSE: HAG) says the recall had seriously affected the group’s business prestige and caused concerns among its shareholders and strategic investors. So, the group wants the department to compensate for this action.
HAG requests the department to respect the terms of Contract No. 818/HD-TTS struck on March 25, 2009, or liquidate this contract, pay back the deposits already transferred to the department and finally make compensation for the unilateral termination of this deal.
But Yen insisted the fact that HAGL had not put the allocated villas in service was a good reason for the retake, instead of waiting for 12 months more to decide as contracted.
The villas allocated to HAG have been deteriorating as they have been unused for around three years. Meanwhile, the contract states these properties will be recalled if the company does not upgrade and put them into service 12 months after the date of receipt. “So, we followed the procedure and regulations,” Yen said.
Dang Hung Vo, the former deputy minister of natural resources and environment, is quoted by Sai Gon Giai Phong as saying that Lam Dong’s recall of the 11 villas seemed to be not in compliance with regulations. The recall must have followed inspections by relevant agencies, he said, and the province should have identified violations on the part of the investor in its decision to recall the villas and met the investor to resolve the issue before allocating these houses to another investor.
Yen stressed the department had sent five invitations to HAG executives so that the two sides could meet to discuss the issue. But the firm only responded to the last request for meeting by dispatching a staff member who the department considered unqualified, Yen said, adding this person did not even sign the minutes of the meeting.
HAGL has to date upgraded and opened eight of the 15 allocated villas while the others have virtually been deserted and the company has attributed this to the province’s failure to hand over the remaining five villas that are intertwined with the deserted villas.
Because of the dispute, HAG chairman Doan Nguyen Duc told reporters that his firm was weighing the possibility of shutting down its operational resort in Dalat, threatening the livelihood of more than 200 employees there.
HAGL said it transferred nearly VND1 billion in June 2003 to support the resettlement of the affected families. HAGL received eight villas in 2004 as agreed by the two parties for phases 1 and 2 of the contract and seven villas from 2005 to 2008.
Yen said the contract did not have any provision detailing the deadline for allocating the remaining villas to HAGL. The 20 villas on 45,882 square meters on Pho Duc Chinh and Nguyen Du streets were designated for HAGL to use for tourism purposes over a period 50 years, based on Contract 09 that Gia Lai-based HAGL signed with Lam Dong’s Xuan Huong Tourism Services Co. in December 2003 and the contract with the department in 2008.
Yen said HAGL had the right to take legal action against the department if the group claimed this agency had violated the contract. “We are ready to defend ourselves at court.”
The dispute between HAGL and Lam Dong went from bad to worse after the province issued Document 6986/UBND-XD in September last year to recall the land plot covering the premises of 11 old villas already approved for HAGL.
The decision resulted in HAG sending a petition to the Prime Minister and relevant agencies to denounce the province’s chairman Huynh Duc Hoa for what the company described as an irregularity. The firm also called for a probe into the alleged violations of Hoa regarding Document 6986/UBND-XD.
VietNamNet/SGT
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