Investor of “elephant head, mouse tail” project fined over 1 billion VND

Violations at the Project "Civil Wood Processing and Export Workshop" of Dong Hoi Development Company Limited were reflected by Nghe An Newspaper in a number of articles: "An “elephant head, mouse tail” project in Dong Hoi Industrial Park” (July 20, 2022); “What violations did the "elephant head, mouse tail" project in Dong Hoi Industrial Park violate?” (July 28, 2022); “Project owner "head of elephant, tail of mouse" takes advantage of policy” (August 4, 2022)…

On August 31, 2022, based on the Administrative Violation Record No. 01/BB-VPHC established by the Inspection Team under Decision No. 163/QD-KKT of the Southeast Economic Zone Management Board dated July 11, 2022, Official Dispatch No. 885/KKT-KHDT dated July 12, 2022 of the Southeast Economic Zone Management Board on requesting the People's Committee of Hoang Mai town to issue a decision to handle administrative violations against Dong Hoi Development Company Limited, along with related legal regulations, the People's Committee of Hoang Mai town issued Decision No. 1121/QD-XPHC to sanction administrative violations against Dong Hoi Development Company Limited.

Bìa những bài viết về dự án “đầu voi đuôi chuột” ở Khu Công nghiệp Đông Hồi trên Báo Nghệ An điện tử.
Cover of articles about the "elephant head, mouse tail" project in Dong Hoi Industrial Park on Nghe An Electronic Newspaper.

Decision No. 1121/QD-XPHC clearly stated 4 administrative violations committed by Dong Hoi Development Company Limited, including: Not complying with the contents of the Investment Registration Certificate; Contributing capital with land use rights for land leased by the State with annual rental payment that does not meet the conditions (contributing capital with land use rights of 19,995m2not meeting the conditions); Constructing a project that is not in accordance with the content of the granted license in the case of granting a new construction license in cases where a feasibility study report or an economic-technical report on construction investment is required; Putting a construction part, construction item, or construction project into use without organizing acceptance.

With these 4 administrative violations, Dong Hoi Development Company Limited must be fined and forced to take remedial measures with a total amount of 1,016,725,000 VND.

Specifically: A fine of VND 85 million for the act of not complying with the contents of the Investment Registration Certificate (stipulated in Point a, Clause 2, Article 19, Decree No. 122/2021/ND-CP dated February 28, 2021 of the Government on administrative sanctions in the field of planning and investment); A fine of VND 130 million for the act of contributing capital by land use rights for land leased by the State with annual rental payment that does not meet the conditions (stipulated in: Point d, Clause 3, Article 19, Decree No. 91/2019/ND dated November 19, 2019 of the Government on administrative sanctions in the field of land); Fine of 110 million VND for the act of Constructing a work that is not in accordance with the content of the granted permit in the case of granting a new construction permit in the case of having to prepare a feasibility study report, or prepare an economic-technical report on construction investment (stipulated in Point c, Clause 6, Article 16, Decree No. 16/2022/ND-CP dated January 28, 2022 of the Government on regulations on administrative sanctions for violations in construction); Fine of 90 million VND for the act of Putting a part of a construction work, construction item, or construction work into use without organizing acceptance (stipulated in Clause 2, Article 18, Decree No. 16/2022/ND-CP of the Government on regulations on administrative sanctions for violations in construction). Regarding remedial measures, the People's Committee of Hoang Mai town forced Dong Hoi Development Company Limited to pay the illegal profits gained from contributing capital using land use rights during the violation period in the amount of VND 601,725,000.

Quyết định của UBND thị xã Hoàng Mai về xử phạt vi phạm hành chính đối với Công ty TNHH Phát triển Đông Hồi.
Decision of Hoang Mai Town People's Committee on administrative sanctions against Dong Hoi Development Company Limited.

The People's Committee of Hoang Mai town requests that within 90 days from the date of issuance of Decision No. 1121/QD-XPHC, Dong Hoi Development Company Limited must complete the application for a revised construction permit from the competent authority. If the revised construction permit is not presented within the above deadline, the construction work and parts of the construction work must be demolished, including: a wood chipping and grinding workshop; a power station and 2 wood material handling machines, and a weighing station canopy. All costs for implementing remedial measures shall be paid by Dong Hoi Development Company Limited. Within a maximum of 3 months from the date of receipt of the decision on administrative sanctions, Dong Hoi Development Company Limited must organize the acceptance of construction parts and construction items and put them into use for construction works and construction items that do not require demolition.

At the same time, Dong Hoi Development Company Limited must pay the fine within 10 days and must strictly comply with Decision No. 1121/QD-XPHC. If Dong Hoi Development Company Limited fails to voluntarily comply within the deadline, it will be forced to comply according to the provisions of law.

One problem that has been reported by Nghe An Newspaper is the project of the Civil and Export Wood Processing Factory invested by Dong Hoi Development Company Limited, but in reality, it is organized and operated by Minh Long 68 Trading and Service Company Limited. Through verification, from July 11, 2022, the time Dong Hoi Development Company Limited was inspected by the Inspection Team of the Southeast Economic Zone Management Board, the Minutes of Administrative Violation No. 01/BB-VPHC until now, the Civil and Export Wood Processing Factory is still organized and operated by Minh Long 68 Trading and Service Company Limited, and has not been suspended.

According to Dong Hoi Development Company Limited, the company's management personnel have changed. The new legal representative said that the company is aware of the previous violations in the project, so it will strictly comply with Decision No. 1121/QD-XPHC of the People's Committee of Hoang Mai town. At the same time, the project will be implemented in accordance with the contents of the Investment Registration Certificate, which are production of civil wood panels and export; production of Wood Pellets for export; production and preliminary processing of wood and wood products. Regarding Minh Long 68 Trading and Service Company Limited, the representative said that in the past, they have worked to propose the liquidation of the previously signed contract but have not achieved results. In the coming time, they will continue to work, if Minh Long 68 Trading and Service Company Limited still does not agree, they will file a lawsuit with the People's Court of Hoang Mai town.

“After signing the economic cooperation contract, Dong Hoi Development Company Limited cooperated and created all conditions in terms of facilities and legality for Minh Long 68 Trading and Service Company Limited to implement the project. However, this Company committed violations such as project implementation behind schedule, construction of construction items not in accordance with the approved planning, operation of construction items without organizing acceptance... These violations were the reason why Dong Hoi Development Company Limited was recorded as an administrative violation by the Inspection Team of the Southeast Economic Zone Management Board, and was administratively sanctioned by the People's Committee of Hoang Mai town. Therefore, if Minh Long 68 Trading and Service Company Limited does not agree to terminate the contract, we will file a lawsuit with the People's Court of Hoang Mai town, requesting the Court to resolve the termination of the economic cooperation contract; requesting Minh Long 68 Trading and Service Company Limited to dismantle the constructed works and hand them over. site to implement the project in accordance with the content of the Investment Certificate..." - the representative of Dong Hoi Development Company Limited discussed.

Hiện trạng nhà xưởng, sân bãi dự án Xưởng chế biến gỗ dân dụng và xuất khẩu.
Current status of factory and yard of civil and export wood processing factory project.