Government Chief Inspector Tran Van Truyen confirmed that the Government Inspectorate will conduct a comprehensive check of Vinashin within the next 75 days.

Government Chief Inspector Tran Van Truyen confirmed that the Government Inspectorate will conduct a comprehensive check of the Vietnam Shipbuilding Industry Group (Vinashin) within the next 75 days.

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Vinashin General Director Tran Quang Vu.

According to Truyen, Vinashin should have been inspected in 2009 as part of the Government Inspectorate’s annual plan but due to global economic crisis, the Prime Minister agreed to postpone inspections of some state-owned groups.

Vinashin General Director Tran Quang Vu characterized the inspection as normal and necessary and he hopes that Vinashin will quickly overcome its difficulties to stabilize its business.

“Each member of our executive board is willing to answer questions of relevant agencies. We will bear our duty. Anyone who made a mistake must be responsible for it,” Vu told VNE online newspaper.

The decision to inspect Vinashin comes at a time when the company is in big trouble. Presently it is undergoing a restructuring by handing over some shipyards and companies to the Vietnam Oil and Gas Group (PetroVietnam) and the Vietnam Shipping Lines Corporation (Vinalines).

Vinashin’s total assets reached 90 trillion dong, with chartered capital of around 9 trillion dong, but its total debt is over 80 trillion dong (over $4 billion). After being restructured, part of Vinashin’s debt, around 20 trillion dong, will be transferred to PetroVietnam and Vinalines.

Early last week, the Party Central Inspection Committee proposed to punish Vinashin Chair Pham Thanh Binh for mismanagement that had led Vinashin to the verge of bankruptcy. The committee also alleged that Vinashin had not honestly reported its financial difficulties to the Government. This group established nearly 200 subsidiaries with no capability in business and production, plus it invested in fields outside its sphere of coverage and additionally bought many old ships, causing heavy losses for the state budget.

General Director Vu admitted that it was a mistake to set up 200 subsidiaries only because Vinashin was impatient to expand its coverage. Most were established in 2006-2007, but Vinashin’s control over these subsidiaries was very loose and they worked ineffectively.

PV