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Ukraine suspects asset stripping from the Ukrainian port in Vietnam

18 July 2019, 09:52

Ukraine suspects asset stripping from the Ukrainian port in Vietnam

Ukrainian shareholders of the port suggest holding an independent audit check. Photo: lotusport.com

Lotus Joint Venture (38% belongs to the Ukrainian SE “Black Sea Shipping Company Blasco”), management company of the Vietnamese port Lotus should pay Ukraine the annual dividends in the size of $1-2 m instead of $150k offered by the Vietnamese party. This was announced by Victor Dovhan, Deputy Minister of Infrastructure on the issues of the European Integration, “Interfax-Ukraine” agency reports.

“The port should bring money. If compared with others, Lotus is close to the Port Kherson, and it should yield approximately $2-5 m. Accordingly, our share should constitute approximately 37%, which is ca. $1-2 m”, the Deputy Minister explained.

According to Dovhan, the Vietnamese party offers to pay Ukraine $150k dividends for the year 2018 but the Ministry of Infrastructure considers the amount to be undervalued and insists on an independent audit. “We have failed to hold an independent audit and we do not see the port performance indicators. We have only some general figures on transloading activities but we do not understand how much money is spent on dredging, wharves renovation, which sort of bonus systems there exists for the port staff. We do not understand how rewards are paid. This should have been checked through an independent audit but we have been refused to run it. This is the subject for our argument with them”, Dovhan remarked.

 The official noted that while the Ministry of Infrastructure does not understand the financial indices, the latter does not intend to approve the port investment plan, which envisages building a container terminal worth of $2 m.

According to Dovhan, the Ministry of Infrastructure suspects that the Vietnamese party stripped certain assets from the port.

Earlier the majority owners of the Lotus JV company ignored a planned working meeting dedicated to the issues of the JV functioning involving Deputy minister of Insfrastructure of Ukraine Mr. Dovhan, who came for that purpose to Vietnam.

Ukraine restored control of its share of the SSC “BSSC” in the authorized capital of Lotus JV in 2018. In the course of their last year visit to Vietnam, the Ukrainian delegation took part in the meeting of the board of governors of Lotus JV and held negotiations with the JV management.

Following the visit, dividends from the activity of Lotus JV for the period of 2012-2016 were received, decisions on distribution of JV profit for 2017 were passed, the results of the Lotus JV audit for 2017 were received from the Vietnamese party, a representative of SSC “BSSC” was appointed First Deputy of the Lotus JV General director, two representatives of SSC “BSSC” were included into the board of governors of Lotus JV.  

According to information from Volodymyr Omelian, Minister of Infrastructure, Lotus JV has not paid dividends to the Ukrainian party from 2011 because of unlawful activity of a SSC “BSSC” in Vietnam.

Port Lotus is located in a major Vietnamese city Ho Chi Minh 43 miles away from the mouth of the Saigon river to the South China Sea. The annual port’s capacity is approximately 2 million tonnes and up to 200k TEU. The harbor is managed by Lotus JV, created in 1991 by the companies Vietrans (Vietnamese Transport company), VOSA (Vietnamese Shipping Agency) and BSSC (afterwards – “Blasco-BSSC”). Currently 62% of Lotus JV is owned by Vietrans, 38% by the SSC “BSSC”. 

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