24 Oct 2009

State picks up tab for absconded bosses

HCM City authorities are seeking solutions to help employees at nine foreign-invested and local enterprises whose bosses have fled without paying the former’s salaries and other dues.
The Labour Union Federation in District 8 has revealed that some 500 workers of the 100 per cent Taiwanese-invested garment firm Duc Quan Ltd. have authorised it to file a lawsuit against the company management for not paying their salaries and fleeing the country.
The chief accountant of the company, Nguyen Thi Oanh, said the general director, Lin Shih Ming, fled the country, leaving unpaid VND1.8 billion in workers’ salaries, VND1.8 billion in social insurance and VND500 million in rent.
Employees of at least five other foreign-invested enterprises in HCM City are facing a similar situation this year, including Vina Haeng Woon Industries in District 8, Quang Sung Vina in Go Vap District and Sin B in District 12.
Deputy chairman of the Federation of the Labour Union in HCM City, Truong Danh Lam, said the code did not include any provision to deal with this issue, offering a loophole for such "hit and run" actions.
City authorities have said they have taken measures to prevent the situation from spreading and to protect local employees from being cheated.
After the boss of the Korean-invested garment firm Sin B fled earlier this year, city authorities asked the Department of Foreign Affairs to co-operate with the Consulate General of Republic of Korea in HCM City to make him fulfill the financial obligations to the employees. The Immigration Department was told not to let him leave Viet Nam until the disputes are settled.
But efforts to contact the director of Duc Quan Enterprise have been in vain.
According to a decision signed by Prime Minsiter Nguyen Tan Dung recently, in instances where the company bosses have absconded, the State budget will pay the employees’ dues and the funds retrieved from the sale of the companies’ assets.
However, the properties left behind by fleeing bosses are usually of little value, meaning tax payers have to foot the bill.
Advocate Trinh Thanh Van said city authorities should keep a closer watch over a company when there were signs of trouble to pre-empt the management from cheating their workers.
Strong FDI flow for Dong Nai
Authorities in southern Dong Nai Province are happy that the FDI (foreign direct investment) inflow into the southern province in the first nine months exceeded the target set for the year, the Thoi Bao Kinh Te Sai Gon (Saigon Economic Times) reports.
According to the Dong Nai Department of Planning and Investment, as of October 15, the province had attracted FDI worth US$2.76 billion, well above the $2 billion target set for 2009. The capital inflow was for 26 new FDI projects and 33 operational ones.
The province is now expected to attract a total FDI of $3 billion for the whole year.
"This is a good sign for Dong Nai’s investment environment," said Bo Ngoc Thu, director of the department. "The figures say it all," she added.
Thu said Dong Nai had continued to mobilise significant FDI at a time foreign investors had scaling down operations due to the global economic and financial crisis.
She said this year FDI flows had been channeled into sectors encouraged by the provincial authorities such as banking, tourism, education, health, electronics and real estate rather than the labour-intensive sectors like textiles and garments and footwear manufacturing.
Thu said they had sought FDI for hi-tech industries and environmentally-friendly projects.
The province has 980 FDI projects operational at present with a total registered capital of more than $15.5 billion.
HCM City seeks fee solutions
The municipal administration agreed last week that homeowners will be allowed to pay land use taxes prevalent at the time of purchase instead of the time of registration for the ownership of the apartment. The decision sought to resolve recent disputes over high land-use taxes levied on home buyers in the Phu My Hung Urban Area.
Hundreds of residents living in Phu My Hung came to the developer’s office to protest after they’d been asked to pay land use taxes that were several times higher than the rates at the time they bought their apartment. The fees amounted to a significant proportion of the cost of the property in several cases.
The buyers argued that they were being penalised for the developer’s long delay in granting land use and property titles.
As a foreign-invested company, Phu My Hung is only allowed to lease land for a limited term. So when a property is sold, authorities will have to redeem the leased land and hand it over to the homeowner, on payment of a land-use fee.
The problem is that the fee is constantly increasing, and has doubled to tens of millions of dong per square metre this year over last year.
According to the corporation, 10,000 apartments in the urban areas have been sold, but only half of the homeowners have paid land-use fees, and the tax department is urging the remaining 5,000 homebuyers to pay up before they can get ownership titles.
But the administration’s solution has not been accepted by managers of Phu My Hung Corp.
Bui Thanh Son, deputy general director of Phu My Hung Corp., said last Tuesday that the fast-increasing fees have caused difficulties to both buyers and the developer.
He said the solution only benefits a group of homebuyers who signed contracts to buy apartments in the urban town several years ago.
The disputes over who will pay for land-use fees did not arise before 2004, when the land use fees were low and reasonable, he noted. At current land prices, many customers who buy apartments this year will have to pay large additional sums to get their titles.
Son asked the city authorities for a long-lasting solution, saying the corporation’s business would encounter big difficulties. This could even make it impossible for them to sell their products if the land-use fees were too high.
"The problem is that the land price is steadily increasing every year, going beyond the homebuyer’s capacity," said Son.
He added before the disputes arose, the corporation had sent a petition to the HCM City government and relevant organisations asking for a stable policy in land-use fees applied to homebuyers in the city.
In the petition, the deputy general director of Phu My Hung Corp., Nguyen Hoang Dung, said the price for land along Bui Bang Doan Street had doubled to VND12.1 million per sq. m this year from last year’s VND6.4 million per sq.m.
Differences in land prices were very uneven. Dung said that the Van Phat Hung Project, which is separated from Phu My Hung by a 20-metre bridge, enjoys a land price of VND3.7 million per sq.m., compared with VND9.9 million per sq.m. in Phu My Hung.
He said it was unreasonable for Phu My Hung residents to pay increasing land-use fees based on infrastructure development, since the infrastructure was developed by the corporation itself, and not funded by the State.
If the new fees were enforced, Dung said residents in the new urban area would have had to pay land-use fees twice, once when the developer leased the land, and once when the properties are handed over to the buyers.

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