Many violations at the Post and Telecommunications Group

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

(Illustration photo: Minh Tu/VNA)

VNPT has transferred charter capital to Vietnam Post Corporation not on time by 796 billion VND; in which, the determination of the difference in value of 253.818 billion VND of Postal Savings Service Company after re-evaluation in the total 6,576 billion VND of charter capital that VNPT has transferred to Vietnam Post Corporation is inappropriate because the assets of Postal Savings Service Company belong to Vietnam Post Corporation.

VNPT is 73.344 billion VND late in paying the public telecommunications fund; the amount to be paid in 2011 and 2012 has not been determined. VMS Mobile Information Company alone has deducted 193.721 billion VND in excess of the cost to pay the public telecommunications fund in 2011 and has not paid in 2011 496.645 billion VND.

The Government Inspectorate assessed that the Ministry of Information and Communications has not properly implemented regulations on issuing decisions approving plans, estimates, adjusting and supplementing support funds; has not yet finalized the collection and payment of the Public Telecommunications Fund for the period 2005 to 2010 and has not yet provided instructions for the implementation of the period 2011 to 2015, accordingly VNPT and VMS Company have been late in paying the fund, and have not yet determined the amount to be paid in 2011 and 2012.

During the period from 2006 to 2011, VNPT implemented a number of large investment projects. During the implementation process, many projects changed, mainly increasing the total investment; progress was slow, with an average delay of 8.7 months for each project, leading to increased investment costs, reduced capital efficiency; and slow settlement of investment capital, especially for large equipment procurement projects.

Some projects such as the copper cable project still have inventory of various cable materials worth 70,497 billion VND; the Cityphone project has losses and assets that have not been fully depreciated totaling 168,522 billion VND due to surveys and calculations that are not close to reality, the development potential and impact of mobile networks as well as the competitiveness of other subscriber networks; the assessment of the development trend of the telecommunications market is not good, not accurately and closely assessing the trend of technological change, the trend of reducing telecommunications rates in general on networks; the investment implementation process has not strictly followed the regulations on investment procedures and processes...

The North-South submarine cable project with a total investment of nearly VND3,000 billion using ODA loans from Japan has been behind schedule for nearly 10 years. The main reason is that the survey, design, budget, appraisal and approval stages lasted from 2004 to 2007; VNPT has not yet properly implemented the requirements. After many urgings from the Government, the Ministry of Information and Communications and the Embassy of Japan, the project has not yet completed the bidding stage, affecting the effectiveness of the project and the investment environment in the use of ODA capital.

The decision to invest in the Vinasat I and II projects with a total investment of VND9,280 billion, although achieving socio-political goals, affirming the nation's sovereignty over resources in satellite orbit, ensuring the requirements of satellite information for security, defense, and natural disaster prevention, by 2011, it had not ensured business efficiency as planned in the approved project, with a loss exceeding the expected VND329 billion.

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 earned VND 322 billion in profit with an average rate of 15.64%; 28 enterprises with an investment value of VND 196 billion but low profit (average rate of only 3.16%) and 20 other enterprises and funds with an investment value of VND 723.8 billion for a long time (from 3 to 5 years) did not earn profit, causing waste of investment capital.

In addition, VNPT has not strictly and fully implemented the procedures according to the Government's Decree and the regulations of the Ministry of Finance on divestment of capital outside the main business lines for 11 units. It is noteworthy that the violations and weaknesses in management at the Postal Finance Company, leading to business losses and large capital losses, have been audited and concluded by the State Audit.

In addition to the above violations, VNPT also committed violations in revenue and cost management, land management and use. VNPT recorded revenue and costs at some inspected units at the wrong time; allocated to financial expenses the exchange rate difference arising from the revaluation of short-term foreign currency deposits in 2006 worth VND 25,586 billion in violation of regulations, reduced profits, and owed VND 7,184 billion in corporate income tax.

VNPT's provision for bad debts was less than the regulations accumulated up to 2011 by VND 202,462 billion; it has not strictly handled the responsibilities of related units and individuals in the management of business activities and telecommunications fee collection contracts, leading to the emergence of large-value bad debts; it made excess provisions for the Welfare Reward Fund, thereby lacking the Development Investment Fund in 2007 by VND 567,275 billion and in 2009 by VND 532,836 billion.

VNPT's business performance from 2006 to 2010 did not meet the set profit margin target, resulting in the equity as of December 31, 2010 not being fully supplemented, lacking VND 2,739 billion compared to regulations.

The Government Inspector General recommended that the Prime Minister direct the Ministry of Information and Communications to propose a project to reorganize and rearrange the operating model of VNPT, promulgate and adjust mechanisms, especially for dependent accounting units, because they have revealed many limitations in management, lack of autonomy in business activities, inaccurate and objective assessment of business efficiency and management of capital and assets at units. At the same time, improve effectiveness and efficiency by decentralizing more specifically and strictly the rights and responsibilities of specialized State management of the Ministry of Information and Communications.

The Ministry reviews and adjusts regulations on advertising and promotion to ensure a healthy and fair competitive environment for businesses. Coordinates with the Ministry of Finance and the Ministry of Natural Resources and Environment to issue mechanisms, inspect and supervise more closely investment and land management; directs VNPT to develop land use plans, plans, and plans for the development of telecommunications network technical infrastructure.

The Government Inspectorate recommends that the Ministry of Finance review the provisions of Accounting Standards, accounting regimes and handling of revenue and expenses for telecommunications services to ensure accuracy and objectivity.

Regarding VNPT, the Government Inspectorate recommended reviewing and directing the review of personal responsibilities 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, special attention was paid to violations in investment, procurement and financial investment, and specific violations at the Post and Telecommunication Finance Company and the International Telecommunications Company. Handling the recovery of taxes to the state budget that VNPT and its member units have not implemented or have not implemented in accordance with regulations, worth VND 105,836 billion, recommending competent authorities to consider and handle the amount of VND 4,907 billion./.

According to (TTXVN) - LT