Violations of up to 3,600 billion VND discovered at Airports Corporation

The Government Inspectorate has just announced the conclusion of the inspection of compliance with policies and laws on management, use of capital, assets, equitization, divestment and restructuring of Vietnam Airports Corporation (ACV).

Accordingly, the inspection agency pointed out that in the period 2012-2015, ACV served over 131 million domestic passengers and over 64 million international passengers; total revenue was over 49,000 billion VND, after-tax profit was over 8,200 billion VND and paid to the state budget over 6,200 billion VND.

However, the management and use of capital, assets,equitization,…at ACVcommitted many violations.Specifically, in the period from 2012 to 2015, ACV used the capital provisioned for major repairs to invest in the construction of the E6 taxiway project at Da Nang International Airport with a value of over VND297 billion. Because ACV used the wrong capital source for investment, the above-mentioned capital provisioned for major repairs is not considered a reasonable expense for calculating corporate income tax. This unit must pay additional corporate income tax with an amount of over VND62 billion.

By March 31, 2016, ACV had only recorded an increase in the assets of the E6 taxiway project, so the value of state assets excluded when determining the enterprise value for equitization was incorrect. "The responsibility belongs to ACV," the inspection conclusion stated.

Violations in land use and equitization

Regarding land management and use, the Government Inspectorate said that by the time ACV switched to operating as a joint stock company, the Airport Authority had not completed the procedures for transferring more than 2,888 hectares of land. ACV had also not signed a land lease contract with annual payments for an area of ​​over 197 hectares, leading to the unit lacking the basis to pay land rent to the state budget in the amount of over 330 billion VND.

According to the Government Inspectorate, the main reason for this is that the Airport Authority is irresponsible, lax in management, and has not proactively coordinated with local authorities to determine boundaries, organize the planting and protection of boundary markers; and 11 airports have not been granted land use right certificates by local authorities for 7,225 hectares.

In addition, the Civil Aviation Authority of Vietnam is said to lack responsibility in inspecting and supervising the Airport Authority in performing land management tasks at airports, airfields, etc.

The inspection agency also discovered that ACV and a number of airport branches subleased land and contributed capital using land use rights for the wrong purposes, not in accordance with State regulations on land lease with a total area of ​​nearly 3,000 hectares of land.

Regarding equitization and divestment, from July 1, 2014 to December 31, 2015, when determining the enterprise value for equitization, ACV excluded the value of airport assets because it no longer had ownership. However, after equitization, ACV continued to use, exploit, monitor, account for and depreciate these assets into production and business expenses with a total amount of more than VND 903 billion. The inspection agency concluded that this was not in accordance with regulations, accordingly, it was necessary to exclude this expense and collect corporate income tax of over VND 692 billion...

Collecting 550 billion VND for illegal parking fees

Through inspection, the authorities discovered that 21 airport branches were collecting fees for using the road leading to the airport terminal for cars picking up and dropping off passengers, which was not in accordance with the provisions of the land law. Meanwhile, 19/21 airports collected over VND550 billion in road service fees; this responsibility belongs to the General Aviation Corporation and the 21 airports.

In addition, the Ministry of Transport has not issued regulations on collecting fees for the franchise of non-aviation services, but let ACV collect them on its own, leading to inconsistent implementation, with some ports collecting fees, others not, and different collection rates. Currently, only 7/22 ports collect fees for the franchise of aviation services, with the revenue in 2014 and 2015 being 102 billion VND.

Proposal to handle more than 3,600 billion VND

The conclusion of the Government Inspectorate stated that the total amount of money and assets in violation discovered through the inspection that need to be recommended for handling is more than3,600 billion VND and over 7,200 hectares of land. After the end of the direct inspection, according to the report, ACV has handled financial violations with a total amount of over 1,158 billion VND.

The inspection agency also recommended handling the responsibilities of individuals, groups and organizations related to violations in the management, use of capital, assets, equitization and construction investment at ACV as stated in the conclusion.