Numerous irregularities at the Vietnam Post and Telecommunications Group.

According to the Government Inspectorate, during the period 2006-2011, the Vietnam Post and Telecommunications Group (VNPT) committed numerous violations related to the management and use of capital.

(Illustrative photo: Minh Tú/TTXVN)

VNPT transferred charter capital of VND 796 billion to Vietnam Post Corporation later than stipulated; in particular, the determination of the difference in value of VND 253.818 billion of the Postal Savings Service Company after revaluation, out of the total VND 6.576 billion charter capital transferred by VNPT to Vietnam Post Corporation, was inappropriate because the assets of the Postal Savings Service Company belong to Vietnam Post Corporation.

VNPT is late in paying the public telecommunications fund 73.344 billion VND; the amount due for 2011 and 2012 has not yet been determined. Specifically, VMS Mobile Communications Company has overpaid the public telecommunications fund by 193.721 billion VND up to 2011 and has yet to pay 496.645 billion VND for 2011.

The Government Inspectorate assessed that the Ministry of Information and Communications had not complied with regulations regarding the issuance of decisions approving plans, budgets, adjustments, and supplementary funding; had not finalized the collection and payment of the Public Telecommunications Fund for the period from 2005 to 2010; and had not provided guidance on implementation for the period from 2011 to 2015. Consequently, VNPT and VMS Company were late in paying the fund and had not determined the amounts due for 2011 and 2012.

During the period from 2006-2011, VNPT implemented several large investment projects. The implementation process involved many projects undergoing changes, primarily increases in total investment; delays, with an average delay of 8.7 months per project, leading to increased investment costs and reduced capital efficiency; and delays in investment capital settlement, especially for large equipment procurement projects.

Some projects, such as the copper cable project, have outstanding inventory of various cable materials worth VND 70.497 billion; the Cityphone project incurred losses and its assets were not fully depreciated, totaling VND 168.522 billion, due to inaccurate surveys and calculations, the potential for development and the impact of mobile networks, as well as the competitiveness of other subscriber networks; the assessment of telecommunications market development trends was inadequate, failing to accurately and accurately evaluate technological changes and the general trend of decreasing telecommunications tariffs across networks; and the investment process did not strictly adhere to regulations on investment procedures…

The North-South undersea fiber optic cable project, with a total investment of nearly 3,000 billion VND funded by Japanese ODA loans, has been delayed for almost 10 years. The main reasons are the lengthy survey, design, cost estimation, verification, and approval phases, which lasted from 2004 to 2007; VNPT (Vietnam Post and Telecommunications Group) has not properly implemented the required regulations, and despite repeated urging from the Government, the Ministry of Information and Communications, and the Japanese Embassy, ​​the project has still not completed the bidding phase, affecting the project's effectiveness and the investment environment for using ODA funds.

The decision to invest in the Vinasat I and II projects, with a total investment of 9,280 billion VND, while achieving socio-political goals, affirming national sovereignty over resources in satellite orbit, and ensuring satellite information requirements for security, defense, and disaster prevention, had not yet achieved the business efficiency as planned in the approved project by 2011, incurring losses exceeding the projected amount by 329 billion VND.

As of December 31, 2011, VNPT had invested capital in 86 enterprises with a total value of VND 3,273.23 billion, of which: 38 enterprises yielded VND 322 billion in profit with an average return of 15.64%; 28 enterprises with an investment value of VND 196 billion yielded low profits (average return of only 3.16%); and 20 other enterprises and funds with an investment value of VND 723.8 billion over a long period (3 to 5 years) did not generate profits, resulting in wasted investment capital.

Furthermore, VNPT has not strictly and fully implemented the procedures and regulations of the Government Decree and the Ministry of Finance regarding the divestment of investments outside its core business for 11 units. Notably, the violations and weaknesses in management at the Postal Finance Company, leading to significant business losses and capital depletion, have been audited and concluded by the State Audit Office.

In addition to the aforementioned violations, VNPT also committed violations in revenue and expense management, and land management and use. VNPT incorrectly recorded revenue and expenses at some audited units; improperly allocated the exchange rate difference arising from the revaluation of short-term foreign currency deposit balances in 2006, amounting to VND 25.586 billion, to financial expenses, resulting in reduced profits and a shortfall in corporate income tax of VND 7.184 billion.

VNPT's provision for doubtful receivables was lower than the regulations stipulated, accumulating to VND 202.462 billion by 2011; it failed to strictly enforce accountability measures against relevant units and individuals in the management of business operations and telecommunications service collection contracts, leading to the 발생 of large amounts of uncollectible debts; and it over-allocated funds for the reward and welfare fund, resulting in a shortfall of VND 567.275 billion in the development investment fund in 2007 and VND 532.836 billion in 2009.

VNPT's business performance from 2006 to 2010 did not meet the set profit margin targets, resulting in insufficient equity capital as of December 31, 2010, falling short of the required amount by VND 2,739 billion.

The Inspector General of the Government recommends that the Prime Minister direct the Ministry of Information and Communications to propose a plan for reorganizing the operational model of VNPT, and to issue and adjust mechanisms, especially for dependent accounting units, as they have revealed many limitations in management, lack of autonomy in business operations, inaccurate and biased assessments of business efficiency and the management and use of capital and assets at these units. At the same time, it recommends improving effectiveness and efficiency by further specifying and strictly decentralizing the authority and responsibilities of the Ministry of Information and Communications in specialized state management.

The Ministry will review and adjust regulations on advertising and promotion to ensure a healthy and fair competitive environment for businesses. It will coordinate with the Ministries of Finance and Natural Resources and Environment to issue mechanisms and conduct stricter inspections and supervision of investment and land management; and direct VNPT to develop land use plans and plans for the development of telecommunications network infrastructure.

The Government Inspectorate has recommended that the Ministry of Finance review the regulations of accounting standards, accounting procedures, and the handling of revenue and expenses related to telecommunications services to ensure accuracy and objectivity.

Regarding VNPT, the Government Inspectorate recommended reviewing and directing the implementation of individual responsibility reviews at the Parent Company and its member units related to shortcomings and violations in the management and use of capital and assets. During the review process, special attention should be paid to violations in procurement and financial investments, and specific violations at the Postal Finance Company and the International Telecommunications Company. The Inspectorate also recommended recovering into the state budget the outstanding or improperly paid taxes of VND 105.836 billion from VNPT and its member units, and recommended that competent authorities consider and handle an additional VND 4.907 billion.

According to (VNA) - LT