VietNamNet: Vietnamese business warned against “foreign fraud”

VietNamNet Bridge – State management agencies have advised businesses to be wary about capital offers, citing a lot of swindling cases in which Vietnamese businesses suffered.

Dr Le Xuan Nghia, Deputy Chairman of the National Committee for Financial Supervision (NFS), said that to date, NFS has received more than 2,000 applications from foreign entities offering loans. However, Nghia said that all the applications were ruses.

Dr of Law Pham Van Chat, Arbitrator of the Vietnam Arbitration Centre (VIAC), said that a lot of foreigners offer to lend money at attractive interest rates as businesses are thirsty for capital in the global economic recession. Therefore, it is understandable why Vietnamese businesses have fallen into the trap.

Several days ago, Vietnamese businesses heard that a foreign business had VND12tril now being kept at Citi Bank in Vietnam, which the business is offering to lend at just 8% per annum.

However, Nghia said that this is just a swindle.

Recently, a Singaporean group announced it would deposit $300mil at a bank or an investment fund in Vietnam. After a certain time, the group would take the capital out to join the bid for a land plot in HCM City. Right after the news was spread, a lot of Vietnamese banks tried to meet the representative of the group, hoping that the sum of money would be deposited at their banks.

However, NFS found out after asking for the assistance of the Singaporean Embassy in Vietnam that no Singaporean group had applied for an investment in Vietnam with capital higher than $50mil.

According to Dr Le Dang Doanh, a senior economist, most Vietnamese businesses are small- and medium-size ones; therefore, they would be very happy to get loans from foreigners.

“As Vietnamese businesses do not share information with others, they always easily fall into a trap set by foreigners,” Doanh said.

Doanh related that a while back, a Chinese company’s representative arrived in Vietnam, discussing a plan to grow tomatoes. However, now that the tomatoes are ripe for harvesting, the Chinese company has disappeared. Meanwhile, the contract signed between the two sides only mentions the duties of the sellers, there are no provisions on the duties of the buyers.

“Vietnamese businesses always have been cheated by ‘virtual’ partners, and because of legal loopholes,” Doanh added.

Nghia advised Vietnamese businesses to seek capital support from banks rather than from unfamiliar foreign partners. He said that the banks’ doors are now wide open as the government has pumped VND100tril into businesses through banks.

Nghia related that in the financial crisis of 1997, Viettel, the military telecom service provider, only had VND55bil. However, the group has been developing rapidly since then after getting soft loans from the government, and now has more than VND5tril.

Source: VietNamNet