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“This is a very difficult case and the progress has been slow despite specific orders from the Prime Minister and the Party Secretary General to accelerate it,” Dung informed at the government’s monthly press briefing on February 2.
The investigation into Mobifone’s billion-dollar acquisition of multimedia company AVG is one of the major concerns for the Central Steering Committee on Anti-corruption, which is chaired by Party General Secretary Nguyen Phu Trong, added Dung.
“Prime Minister Nguyen Xuan Phuc and Deputy Prime Minister Truong Hoa Binh have requested the Government Inspectorate to report the results of the investigation, as well as their findings on the responsibilities of related individuals and organizations to the Central Steering Committee on Anti-corruption.”
The result will be made public afterwards, said Dung, adding that any sign of violations would be subject to further criminal probes.
On September 6, 2016, the government inspectorate announced their decision to investigate MobiFone, Vietnam’s third largest telecom company.
The investigation of Mobifone’s acquisition of AVG was to last for 50 days, however, the process has been dragged out to nearly one and a half year since then. The investigation’s final results, to date, have yet to be announced to the public.
It was previously reported that Mobifone purchased 95% of AVG’s stakes for VND8.9 trillion (US$400 million), 2.58 times higher than AVG’s charter capital (VND3.6 trillion, or US$158 million) at the time of completing the transaction o January 2, 2016.
The investment in AVG was equivalent to 55% of Mobifone’s charter capital (VND16.2 trillion or US$711 million) and 40% of its total assets (VND23.2 trillion or US$1.02 billion) as of June 30, 2016.
AVG, which entered the pay TV market at the end of 2011, expected the share sale to help it solve its financial difficulties. At the end of 2014, it had a 6.4% market share.
AVG was established in 2008 and rolled out its television services in 2011. Its subscribers in 2014 numbered around 450,000, accounting for some 4.5% of Vietnam’s 9.9 million subscribers at the time. It was founded by Pham Nhat Vu, the younger brother of Vietnam’s first billionaire Pham Nhat Vuong.
The ongoing investigation is becoming a main hurdle as Mobifone is planning for its initial public offering (IPO) this year, following several delays in the past.
Mobifone was valued at US$3.4 billion by Ho Chi Minh Securities Corporation (HSC) in 2015 as part of its planned IPO in 2016. However, the move failed to materialize in spite of interest from foreign telecom service providers like Singtel (Singapore), Telenor (Norway), Comvik (Sweden) or Telstra (Australia).
As Mobifone’s US$3.4 billion valuation is only valid for 18 months, the company will have to be revalued, which is expected to take 6 months before starting the equitization process.