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SSC fines Haxaco and Phuong Nam for weak reporting
The State Security Commission (SSC) has just issued a decision to impose administrative fines of VND60 million ($2,654) and VND240 million ($10,619) on Hang Xanh Car Service JSC (Haxaco)—a local dealer of Mercedes—and Phuong Nam Cultural JSC, respectively, for incorrect reporting.
Accordingly, Haxaco has violated regulations by not mentioning the firms related to its business in its corporate governance reports in 2016 and 2017. The firms include Can Tho Car Mechanic JSC, PTM Car Service and Trade Manufacturing JSC, and even several individuals making transactions with the firm.
Haxaco is the first and biggest dealer of Mercedes in Vietnam, holding 30 per cent of Mercedes’ market share in the country.
In early October, SSC also decided to impose a fine of $10,619 on Phuong Nam Cultural JSC for announcing its financial information after the deadline stipulated by the regulations of the Ho Chi Minh City Stock Exchange (HSX) and SSC.
Accordingly, the information in question includes the separate and unified financial statements for 2016’s second half, 2017’s first quarter, 2017’s first half, and the document explaining 2016’s business results.
Phuong Nam also announced false information related to its profit after corporate income tax and corporate management fees.
Over the past few years, Phuong Nam’s business performance has been poor. Especially, in 2017, the firm announced record losses of VND66.4 billion ($2.93 million), raising its accumulated losses to VND106 billion ($4.69 million).
Along with this, its long-term debt from Cross Junction Investment (CJI) also forced Phuong Nam to sell its most efficient investment, CJ CGV, at a price equalling only 60 per cent of what the stakes were worth seven years ago.
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