La Nga Sugar chairman gives up position

Friday, May 23, 2008
Chairman and General Director of La Nga Sugar Company Pham Nhu Hoa has resigned from his post after the company’s shareholders’ meeting concluded that he caused the loss of VND7bil to the company due to unprofitable securities investment deals.

Hoa was discovered to have used VND17.7bil of the company’s money to make investments in securities without getting permission from shareholders.

Acting Chairman of the Management Board of the Sugar Corporation II Tong Thong has been appointed the new chairman of La Nga Sugar Company, while Deputy General Director of La Nga Sugar Company Tran Van Nga will become the new General Director.

At the shareholders’ meeting, the La Nga Sugar Company’s Supervision Board reported that the sum of money Hoa injected in the shares of 10 securities companies had decreased by nearly VND7bil by April 17 (the time when the case was discovered) due to the market’s falls.

Hoa admitted his mistakes to the shareholders, saying that he did not follow the necessary administrative procedures (he did not get permission for investments from the management board) when using the company’s money to invest in securities.

Hoa suggested using his own money to compensate the company for 3% of the losses caused by the securities investment deals. The shares will be all sold later when the stock market recovers, to take back capital.

Prior to that, in early May, during a working session with the management board and representatives of shareholders, Hoa also admitted mistakes and proposed his resignation.

La Nga Company’s shareholders were split when they were asked to decide whether to sell shares to take back capital right now, or sell later when the prices go up again. 45.49% of shareholders agreed to sell later, while 54.27% do not want to keep the shares indefinitely. However, as the votes were less than the necessary proportion of 65%, the problem still needs the opinion of the 2008-2012 term management board to be settled.

Meanwhile, 96% of shareholders did not agree with the proposal by Hoa to pay 3% of the loss (the share price decrease) with his own money.