Credit loan package broken, golden land project in Dak Lak turns into a rusty iron block

Bank violates credit disbursement

In November 2007, Dak Lak Provincial People's Committee issued a decision to lease 3,385m2 of land to Thanh Nien Technology and Economic Development Co., Ltd. (abbreviated as Thanh Nien Company) to implement the Dak Lak Cultural, Commercial and General Service Center Project (Dak Lak Center).

The project area is located on two fronts of Nguyen Tat Thanh street and Truong Chinh street, Buon Ma Thuot ward (province center).

Two years later, the investor rights were transferred to Cao Nguyen Investment Joint Stock Company (Cao Nguyen Company). According to the plan, the project is divided into two phases, with a total estimated investment of more than 380 billion VND.

In which, phase 1 (2007 - 2010), the investor built a 4-story building, floor area of 12,000m2 with an investment capital of 125 billion VND. Phase 2 (from 2010), the investor raised the project to a scale of 18 floors, total floor area of 24,000m2.

The credit loan package arranged by OceanBank for the investor to implement the project has a term of 10 years. As of February 2013, the bank has disbursed more than 43.4 billion VND to the investor.

After that, the investor repeatedly requested this bank to continue disbursing the remaining amount of more than 19 billion VND, but the bank did not respond.

By the end of 2014, OceanBank resold a debt of more than 43.4 billion VND to Vietnam Asset Management Company Limited (headquartered in Hanoi).

However, in the debt purchase and sale contract, only the rights to the loaned debt were transferred, without the obligation to disburse the remaining amount of more than 19 billion VND. The bank also unilaterally terminated the credit loan package contract signed with Cao Nguyen Company.

Due to lack of capital and legal disputes with banks, this project only started rough construction to the 4th floor (in phase 1). From 2013 to now, the entire project has been stalled.

By January 2018, the Department of Planning and Investment of Dak Lak (now the Department of Finance of Dak Lak) issued a decision to terminate the Dak Lak Center project. The reason was that the investor was unable to implement the project according to the registered progress.

Not yet able to resolve it definitively

After many years of suspension, the Dak Lak Center project has become an abandoned building located right on the busiest road in Dak Lak province. According to reporters' observations, the steel structures have begun to rust and degrade due to the impact of weather.

Mr. Nguyen Toan Thang (resident of Buon Ma Thuot ward) commented: "The abandonment of a prime land fund not only causes waste of land resources and investment resources but also causes budget losses when the project has not contributed tax and land use fees to the State.

Mr. Cao Van Thang - Chairman of the Board of Directors cum General Director of Cao Nguyen Company said that the enterprise is falling into a difficult situation. The bank unilaterally terminated the credit contract after the bankruptcy incident, causing the project's financial resources to be completely broken.

We expect the Dak Lak Provincial People's Committee to have a direction to remove legal bottlenecks, create conditions for the unit to revive the project, and avoid prolonged waste," said Mr. Cao Van Thang.

Mr. Nguyen Thien Van - Vice Chairman of Dak Lak Provincial People's Committee said that the Dak Lak Center project is on the land recovery list due to prolonged implementation time. The province has also decided to terminate the project and the judgment enforcement agency has just organized an inventory to implement the related judgment.

Regarding the proposal to restore the project, the Vice Chairman of the Provincial People's Committee confirmed that the province has made a proposal to the Central Government regarding the problems of the projects. However, the locality is waiting for instructions from the Central Government to consider and have a satisfactory handling direction.