AVG deposits VND450 bln to cancel unlawful contract with MobiFone

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Audio Visual Global JSC (AVG) is promoting cancellation of a contract with state-owned telecommunication company Mobifone.

AVG deposits VND450 bln to cancel unlawful contract with MobiFone

The affair in which MobiFone will acquire 95 percent AVG share has been being investigated by the Government Inspectorate Agency.
According to the two sides’ agreement, AVG shareholders have paid a deposit of nearly VND450 billion ($19.76 million) to commit to canceling the contract.
The Ministry of Information and Communications yesterday reported the contract termination to the Secretariat of the Communist Party of Vietnam, the Permanent Government and the Government Inspectorate.
On the previous day, the leader of the Ministry of Information and Communications, which is a governing body and owner representative of MobiFone, witnessed the contract cancelation signing ceremony between MobiFone and AVG shareholders.
AVG shareholders will return the entire money from the share sale which MobiFone has paid and MobiFone will return all shares and properties it received from AVG.
The two sides will do necessary things to ensure no damage for either side and not affect the state’s capital and benefit, agreeing to establish a working group to carry out the contract cancellation and handle relevant issues.
The Ministry of Information and Communications yesterday afternoon announced that with the above agreement, MobiFone will receive an amount of money larger than the funds which it has paid AVG shareholders thanks to interest and relevant cost payment.
MobiFone has not paid the leftover of 5 percent of the share purchase value as per payment progress committed in the contract because of the deal investigation.
In case MobiFone does not accept to demolish the contract, the group of AVG shareholders are entitled to unilaterally terminate it according to the law and MobiFone might be penalized up to 8 percent of contract value. That is unprofitable for MobiFone and the state.
The ministry said that the contract cancellation is a lawful optimal solution to fully reclaim state capital which MobiFone has invested in AVG and ensure no capital loss to the company and the state according to instructions by the Secretariat of the Communist Party of Vietnam.
Meantime, MobiFone has made an announcement saying that it has reported the contract termination policy to the Ministry of Information and Communications and the ministry has approved.
On March 8, the Secretariat of the Communist Party of Vietnam sent a document prosing the Permanent Government and Government Inspectorate to take responsibility for inspection conclusion over MobiFone purchase of 95 percent AVG stake early 2016. The deal has the total value of VND8,889 billion (US$390 million).
The Secretariat required them to soon announce inspection results and relevant agencies to handle the case objectively and accurately according to the Party rules and the state law to make clear violations and reclaim state properties.

By TRAN BINH – Translated by Hai Mien

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