Chairman denies losing company money in personal investments

Friday, May 2, 2008
The chairman of a southern sugarcane company has rejected allegations that he bankrupted the enterprise by investing company money in the stock market.
On Monday, shareholders of the La Nga Sugarcane and Sugar Company in Dong Nai Province sent a petition to several ministries and the Government Inspectorate accusing chairman Pham Nhu Hoa of misspending company funds.

The shareholders claimed Hoa had earmarked around VND17 billion (US$1.05 million) for personal stock investments without asking for approval from the board of directors.

The investment incurred heavy losses, according to the shareholders, who said that their April 22 meeting had to be postponed as there was no money to pay their dividends.

The fuming stakeholders have repeatedly demanded that the dividends be paid back.

Speaking with Thanh Nien Wednesday, Hoa said he had invested in the stock market in a bid to bail the company out of financial difficulties.

The beleaguered chairman said he had invested under the La Nga company name, not under his own.

He showed correspondents two contracts acknowledging that La Nga Company had bought shares in Rubber Securities Company and the Sacombank Securities Company.

Though Hoa admitted he had failed to obtain approval from the board of directors, he insisted he had acted in the interests of the company, not his own.

Hoa told Thanh Nien that five out of the board’s six members had backed his investment at a directors’ meeting on April 18, though he did not seek official approval.

He said he would elaborate more on the investment decision and apologize to the shareholders at another board meeting on Saturday.

The firm’s next shareholder meeting is scheduled for mid-May, according to Hoa. (Thanh Nien)