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OoG Minister: MobiFone's AVG deal difficult to investigate

Released at: 13:59, 03/02/2018

OoG Minister: MobiFone's AVG deal difficult to investigate

Photo from anvientv24h.com

Original 50-day investigation still underway one and a half years later.

by Quang Huy

An inspection of MobiFone’s purchase of AVG shares remains ongoing despite efforts by the government to complete it, Minister and Chairman of the Office of the Government Mai Tien Dung told a press briefing after the government’s monthly meeting on January 2.

Launched in early September 2016, the planned 50-day inspection, in what the government first said was a normal activity, has dragged out for nearly one and a half years.

“Progress has been slow despite orders from the Prime Minister and the Party Secretary General to accelerate it,” Minister Dung said. “This is a very difficult case.”

“Both the Prime Minister and Deputy Prime Minister Truong Hoa Binh have held many meetings with relevant agencies to handle the case and have specifically assigned the Government Inspectorate to report the results of the inspection to the Central Steering Committee on Anti-Corruption and the Party Secretary General,” Minister Dung added.

MobiFone, Vietnam’s second largest telco, revealed in November 2016 that its acquisition of Audio Visual Global (AVG), the operator of the An Vien Pay TV service, cost it almost VND8.9 trillion ($400 million). Earlier that year, the State-owned enterprise announced it had acquired a controlling stake of 95 per cent in AVG, but did not reveal the deal’s value.

In its quarterly financial statement for the second quarter of 2016, MobiFone stated that the deal, which accounted for some 40 per cent of its total asset value as at the end of June 2016, was its only investment during the period. The transaction was completed on January 2, 2016, according to the statement.

The government decided to scrutinize the deal several months later as the MobiFone had not revealed the actual details of the deal, even as it began working on its listing. MobiFone’s upcoming IPO is among the most anticipated in the country.

MobiFone said that purchasing the Pay TV unit and deploying 4G data services were aimed at increasing its valuation and making its upcoming IPO more attractive. The tentative offering, long delayed for several years, has triggered interest from a range of major telcos around the world, including Singtel, Telstra, Telenor, Comviq, and Axiata.

According to Minister Dung, relevant ministries and agencies are actively clarifying issues relating to the valuation process of AVG, the procedures followed in the deal, and the responsibilities of individuals and parties.

At the 12th meeting of the Central Steering Committee on Anti-Corruption last July, Party Secretary General Nguyen Phu Trong called for investigations into many major cases monitored by the committee to be accelerated.

The committee sought prompt inspections at nine major loss-making projects and a faster inspection of the 95 per cent purchase of AVG by MobiFone.

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