Finishing the inspection of Bao Viet Group, Vietnam’s leading state-run insurer, Vietnam’s government Inspectorate discovered many shortcomings in the work of construction investment, financial investment, insurance compensation and others, the Tuoitre Newspaper reported on November 29.
Accordingly, the government Inspectorate proposed Bao Viet leaders to meet to make direct review and draw experience in order to rectify the shortcomings soon, have sanctions against individuals and collectives involved in such shortcomings. The government Inspectorate required Bao Viet to withdraw more than 20 billion dong from subsidiaries and associated projects, and filed for a custody account pending the punishments of the inspection agency.
Many errors in insurance activities
The inspection result showed Bao Viet Group along with subsidiaries made several errors in loans, entrusted loans and insurance activities.
The government Inspectorate said that Bao Viet and its subsidiaries were not close in asset management to ensure loans and were slow in implementation of measures to recover the loans, which made many loans fall into the situation “dropping chicken to chase” such as 4.6 billion dong debt (including interests) for loans Green River Co., Ltd since 1999; $3 million loan entrusted to Orion Hanel Co., Ltd, of which there is still over $2 million that has yet to be recovered, while this company has filed for bankruptcy.
Having examined a number of insurance compensation records in some insurance companies under Bao Viet Group, the government Inspectorate found that many records were made against the principles of compensation. For example: when checking 11 claims for cargo insurance, Thanh Le Import-Export Trading Company (in Binh Duong Province) and two cargo insurance records for Vedan Vietnam Co., Ltd (in Dong Nai Province), the inspectorate detected of amending and supplementing the insurance on the name of ships, numbers of bill of loading, quantity, and price be made when the unloading was completed on board.
Or, Bao Minh Company also granted insurance to the Management Board of Ho Chi Minh Road Project after the date of loss, and the insurance premium is not paid yet to the insurer.
Besides the above errors, the government Inspectorate also requested Bao Viet Group and its subsidiaries to immediately rectify the shortcomings of other procedures and the process of insurance compensations.
680 billion dong investment… stranded
Through the inspection of financial investments, the government Inspectorate detected, in 2007 – 2009, Bao Viet and other subsidiaries bought 680 billion dong of Vinashin bonds (including the bonds of Bao Vietnam Fund Management Ltd as trustee of the fund to buy BVF1). In which, the par value of bonds, mature in 2012 and 2013 is 200 billion dong and in 2017 is 480 billion dong. However, Vinashin bonds that Bao Viet and its subsidiaries invested is not secured now.
The government Inspectorate said that, when invested 160 billion dong in bonds issued by Vinashin in December 2008, Bao Viet and its members did not obtain enough information about the real situation of business activities of this group. The investment with the lack of information has made a large amount of Bao Viet and its subsidiaries stuck here.
In addition, many financial investments of Bao Viet and its investment funds do not bring back good results from companies that they invested due to their big losses in business. In details by December 31, 2009, Bao Viet Securities JSC accumulated losses more than 122.2 billion dong; Viet Long Securities Investment Fund lost 112.8 billion dong; Bao Viet Securities Investment Fund saw its value of fund units just at 95.2 percent compared to newly established.
In addition, the government Inspectorate also pointed out the inefficiency of investment and business activities of Bao Viet in travel services, real estate, and recreation industries.