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Part 2: Kenmark group and the 50 million dollar debt
The Taiwanese group, which registered a big 500 million dollar investment project in Hai Duong province, made the local authorities and people exult. However, just after a short time of staying in Vietnam, it has fled, leaving the unpaid 50 million dollars. The provincial authorities still do not know how to deal with the case.
* When FIEs fled and refused to pay debts
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The Taiwanese group, which registered a big 500 million dollar investment project in Hai Duong province, made the local authorities and people exult. |
The most gigantic project turned out to be the worst
In 2005, the Hai Duong provincial authorities released the decision on allowing Taiwanese Kenmark group to develop a 500 million dollar project in the Viet Hoa Industrial Zone in Hai Duong City. By that time, the project had been considered the biggest one in the locality.
The investment license granted to Kenmark clearly said that Kenmark would build industrial production areas, business-trade areas, urban area, and an entertainment complex on a 100 hectare land plot. The project was scheduled to be developed in two phases. In the first phase, 90 million dollars would be poured into the project to build the items on the area of 46 hectares.
Sources said that Kenmark easily borrowed 50 million dollars from the Thanh Do branch of the Bank for Investment and Development of Vietnam (BIDV), SHB Quang Ninh, Habubank Bac Ninh. Of these banks, BIDV Thanh Do was the biggest creditor.
In May 2010, two factories of Kenmark suddenly stopped operation, while the investor informed the Hai Duong provincial authorities that Kenmark stopped the operation in Vietnam.
Right after hearing about the collapse of Kenmark’s project in Vietnam, a lot of domestic contractors flocked to Kenmark’s production bases to carry thousands of tons of steel away from the Viet Hoa-Kenmark Industrial Zone to partially recover the debts.
Meanwhile, disputes between commercial banks – the creditors of Kenmark – and contractors – the clients of Kenmark – were also raised.
According to Mai Duc Chon, Head of the Hai Duong provincial Management Board of Industrial Zones, the biggest mistake that BIDV Thanh Do made was that it lent money to Kenmark to help the investor buy fixed assets.
“The lending came contrary to the Vietnam’s policy on attracting foreign direct investment,” he said. “Vietnam needs foreign investors because it wants the investors to bring capital to Vietnam. We do not want foreign investors to come to Vietnam just to borrow money from Vietnamese banks,” he said.
The Hai Duong Management Board of Industrial Parks then decided to close the Viet Hoa-Kenmark to protect the assets there.
Banks made mistakes
The production bases in the Viet Hoa-Kenmark industrial zone have been left idle since May 2010. No contractor can be found here. The only officers who are still working are security guards. Two years after the Hai Duong provincial authorities released the decision to close the industrial park and they have not taken any further moves, because they really do not know how to deal with the case.
According to Chon, a lot of Japanese investors and domestic investors have expressed their intention to rent Kenmark’s workshops, but no one has come so far.
Nguyen Xuan Doan, Deputy Director of the Hai Duong provincial Planning and Investment Department, told Tien phong that Kenmark has spent some tens of millions of dollars so far, while the remaining money for the project has been borrowed from Vietnamese banks.
However, Chon does not agree with the police’s conclusion that the Taiwanese investor has fled, saying that the Taiwanese owner of Kenmark still flies to Vietnam, while the workshops and the land area remain untouched.
Chon has affirmed that Kenmark has spent 70-80 million dollars to build factories, while it borrowed 50 million dollars from banks. He also said that Kenmark has asked the Hai Duong provincial authorities to instruct BIDV Hai Duong to allow to delay the debt payment, stressing that only this method can help Kenmark take necessary measures to pay bank debts.
vietnamnet
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