State Audit asks Sabeco to pay US$111 million

The State Audit of Vietnam has requested the Saigon Beer-Alcohol-Beverage Corporation (Sabeco) pay to the State budget nearly VND2.5 trillion (US$110.9 million) worth of dividends, taken from the brewer’s undistributed profit for the period prior to 2016.

The amount that brewer Sabeco should pay to the State budget was calculated based on the State’s ownership ratio of 89.59% at Sabeco as of December 31, 2016.

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According to Sabeco’s financial report audited by PwC Vietnam Co Ltd, the undistributed profit for the prior-2016 period was more than VND2.9 trillion and the distributed profit was VND2.78 trillion.

For the dividends of the remaining profits that had not been distributed before 2016, the representative of the Government in managing the State capital in Sabeco on November 4, 2016 sent a letter to the Ministry of Industry and Trade (MoIT) for guidance.

In response, MoIT has not had a plan to make dividend payment out of Sabeco’s profits. The ministry asked the State capital representative at Sabeco to deliver financial reports each year since it started operating until the end of 2016 and asked for the opinions of the Prime Minister about the remaining undistributed profit.

In addition, the State Audit of Vietnam demanded MoIT clarify individual and collective responsibilities for miscalculating the valuation of Sabeco Pearl, a subsidiary of Sabeco.

In June 2016, Sabeco sold its entire 14.7 million shares or 26% stake in Sabeco Pearl on a full-package deal at the price ofVND13,247 per share, and the bidding price was VND13,347 per share.

The deal has remained confidential and the buyer has remained unknown.

According to the State audit agency, the valuation of Sabeco Pearl showed some mistakes and miscalculations, which reduced the value of Sabeco Pearl and resulted in the loss of State capital.

The State Audit of Vietnam reported that Sabeco had made a provision fund for its financial losses in 10 long-term investment projects, in which Sabeco had 20 percent of total charter capital.

The provision was calculated at 77.8% of the total investment value, including a VND154 billion investment in the Orient Commercial Joint Stock Bank (OCB) and Dong A Joint Stock Commercial Bank (DongA Bank).

Most of those investment deals were not Sabeco’s core businesses and the State Audit asked the MoIT to clarify the causes and consider individual and collective responsibilities that were involved in the 10 investment deals.

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