Implementing the conversion of Nghe An 1/5 LLC: Need to completely handle outstanding debt!

Legitimate recommendations
According to the employees of Nghe An 1/5 LLC, their unit has a debt that has been outstanding for many years but has not been recovered yet. These are all debts from the time the company started producing pineapples as raw materials for processing factories in the area according to the province's policy since 2000.

Of particular concern is the outstanding debt of Nghe An Food Joint Stock Company worth nearly 1 billion VND. “This is really an issue that makes us angry. Because if the company cannot collect the outstanding debt and clarify the financial issues, then when it converts into a 2-member company, in addition to affecting the company's capital, it will also affect the legitimate rights and interests of the company's officers, employees and workers...” - 1/5 of the company's workers were upset.

1/5 Nghe An Company Limited.

Regarding the thoughts and aspirations of the collective of cadres, employees and workers, according to the Chairman of the Trade Union Le Hong Son, in the coming time, Nghe An 1/5 LLC will be transformed into a 2-member LLC according to the Decision of the People's Committee of Nghe An province. Therefore, it is desired that before the transformation, it is necessary to have financial transparency; collect all outstanding debts to stabilize production and business, maintain jobs for employees in the company, ensure the rights of the enterprise and of cadres, employees and workers, and at the same time have a basis to determine the value of the enterprise to serve the conversion to a 2-member LLC.

Need to be dealt with thoroughly
Speaking with Nghe An Newspaper reporters, the leader of Nghe An 1/5 LLC also acknowledged that “the workers’ petition for financial transparency and settlement of outstanding debts is a legitimate desire”; and said that “the company is currently handling these contents”.

In addition, the total amount of money that Nghe An Food Joint Stock Company owes to Nghe An 1/5 LLC as of December 31, 2008 is publicly disclosed as VND910,110,805. As of July 14, 2009, VND300,000,000 has been paid. However, since December 2009, Nghe An Food Joint Stock Company has not reconciled its debts and paid them. To date, the outstanding debt and late interest from Nghe An Food Joint Stock Company has amounted to nearly VND1 billion.
Director of Nghe An 1/5 LLC, Mr. Phan Tuan Cuong, said that from 2009 until now, Nghe An Food Joint Stock Company has not implemented financial principles, verified debts and paid debts to Nghe An 1/5 LLC without stating the reason. Nghe An 1/5 LLC has contacted many times, requested to work directly but received no response.

By 2018, following the direction of the Government and the Provincial People's Committee, Nghe An 1/5 LLC will be transformed into a 2-member LLC. To ensure progress in implementing the enterprise conversion project, it is necessary to determine the enterprise value. Therefore, this year the company has sent staff to the export vegetable and fruit processing factory many times to compare and confirm debts.

However, it was not possible to do so. Even on November 26, 2018, over the phone, the highest leader of Nghe An Food Joint Stock Company, Mr. Nguyen Manh Hung - Chairman of the Board of Directors of the company, said bluntly that he would not confirm the debt for the company and that 1/5 LLC could do whatever it wanted. "With the uncooperative attitude of Nghe An Food Joint Stock Company, we think that this company is deliberately avoiding responsibility and refusing to pay its debt..." - Mr. Phan Tuan Cuong said.

Contract No. BA0001 dated April 16, 2007 and debt reconciliation minutes between Nghe An 1/5 LLC and Nghe An Food Joint Stock Company.

However, according to the available records and documents, the related issues between these two enterprises are quite clearly shown. Regarding the supply of pineapple raw materials between Nghe An 1/5 LLC and Nghe An Food Joint Stock Company, it is shown in Contract No. BA0001 dated April 16, 2007. The content of the contract shows the implementation principles; methods of purchase, transportation, price; payment method... as well as the responsibilities of the two parties in implementing the contract. Regarding the outstanding debt, it is shown in the record of reconciliation of pineapple debt up to December 31, 2008. This record of debt is made based on the principles of the signed contract; the record is stamped by Nghe An 1/5 LLC and Nghe An Food Joint Stock Company; on the side of Nghe An Food Joint Stock Company, Mr. Nguyen Manh Hung, with the title of General Director, is the person who signed the record.
How will Nghe An 1/5 LLC handle this debt? Mr. Phan Tuan Cuong affirmed that he will clarify and request Nghe An Food Joint Stock Company to confirm the debt and pay the debt. Because Nghe An 1/5 LLC is a 100% state-owned unit. If Nghe An Food Joint Stock Company does not confirm the debt and does not pay the debt, it means that Nghe An 1/5 LLC has lost capital and the company director himself will be responsible before the State and the law for this amount. At the same time, Mr. Cuong also said that on December 17, 2018, Nghe An 1/5 LLC filed a lawsuit against Nghe An Food Joint Stock Company with the Vinh City People's Court according to the provisions of law.
From the information and documents available, it can be seen that the petition of the employees of Nghe An 1/5 LLC is completely legitimate. The outstanding debt is not only the property of the enterprise, but also the efforts of the staff, workers and employees. Therefore, it is recommended that the competent authorities pay attention to directing the final settlement, thereby ensuring the rights of the employees before Nghe An 1/5 LLC implements the business model conversion.