Government Inspector: MobiFone's valuation of AVG is more than 8 times incorrect.
If we deduct the debt, AVG's value is less than 2,000 billion VND, but MobiFone used the figure of 16,565 billion as the basis for the purchase and sale.
AVG has always been in difficulty since its establishment, with continuous accumulated losses, but MobiFone used the valuation results to determine AVG's value at 16,565 billion VND.as the basis for the purchase price of shares. This figure is given byCompanyAMAX Investment Consulting and Valuation Co., Ltd. (AMAX) with input bases that the Government Inspectorate considers "unreliable".
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AVG's equity value is less than 2,000 billion VND, but MobiFone used the valuation result of more than 16,000 billion VND as the basis for buying shares. |
But in reality, AVG's value is less than one-eighth of this figure. According to the Government Inspectorate,AMAX used baseless input data to determine the value of off-balance sheet intangible assets of VND13,448 billion.
Meanwhile, if this figure and AVG's payable debt of VND1,134 billion are excluded, AVG's equity value at the end of March 2015 was only VND1,983 billion. This figure does not include the revaluation of the real value of AVG's financial investments outside the enterprise. This also means that the valuation result of VND16,565 billion of AMAX is more than 8 times higher than the Government Inspector's calculation.
MobiFone's failure to deduct 1,134 billion VND in payable debtsHi, the negotiation of the purchase price of shares has been completed.cause damage of the corresponding amount.
Comparing the level of VND 1,983 billion with "the purchase price of 95% of AVG shares of VND 8,889.815 billion shows the existing risk of serious damage to State capital at MobiFone of about VND 7,006 billion", the conclusion of the Government Inspectorate stated.
During AVG's valuation process,MobiFone has violated and lacked responsibility from choosing consultants to acceptance.Specifically, this Corporation selected Vietcombank Securities Company Limited (VCBS) and transferred the request documents to VCBS before issuing the documents. In addition, MobiFone also allowed the contractor to add documents to the proposal documents after approving the results of the bidding. This practice, according to the Government Inspectorate, violates the prohibited acts in Article 89 of the Law on Bidding.
When selecting AMAX Investment Consulting and Valuation Company Limited (AMAX), MobilFone only based on the lowest quotation among the three consulting units, did not follow the bidding process, violating Government regulations.
MobiFone's acceptance of AMAX's appraisal results and its comments and evaluation of these appraisal results as "in compliance with Vietnamese valuation standards" according to the inspection agency shows a lack of responsibility. Because the Government Inspectorate believes that the valuation results of AVG by consulting units are not objective, do not ensure legal basis and reliability, and violate the provisions of valuation standards. That result also incorrectly limits many important contents, especially the basis and feasibility of AVG's 2015-2020 planning data source that the consulting unit used to determine the value of this unit.
According to the Government Inspectorate, the total amount of money under the contract that MobiFone signed with the two consulting companies was 3.19 billion VND and 1.54 billion VND had been spent. This agency recommended that the Chairman of the Board of Directors and the Deputy General Director in charge of finance and accounting be responsible for recovering and handling the money spent on the two consulting companies.
