A prime land in Ho Chi Minh City has been left undeveloped due to government officials’ misconducts in the past. Kido Group, the investor who acquired the stake of the former national land from the original investors, suffers huge loss due to the deadlocked project.
The 5,000 square-meter real estate complex development on Le Duan Street in District 1 was settled by the Prime Ministerial Decision in 2007. As the entity to implement the project “Lavenue,” the City approved the establishment of a joint venture between HCMC Housing Development and Trading and a four-companies group under the Ministry of Industry and Trade, each of which contributed half of the charter capital. In 2011, Lavenue was granted the land use right, but before the authorization, the above four companies under MOIT had sold the stake to Kinh Do Investment (currently Kido Investment) with VND 20 billion (USD 9 million) profit.
Government Inspectorate later pointed out in 2016 that the City granted the land, without bidding, to investors that had only insufficient financial capacity, concluding that “Mr. Nguyen Thanh Tai, then Vice Chairman of Ho Chi Minh City People’s Committee, bears direct responsibility for” the decision. Mr. Tai was arrested this month.
The scandal has negatively hit Kido, which invested VND 1,087 billion (USD 47 million) for the stake. It remains to be seen when or whether Kido can start the development. The latest financial statement of Kido shows that the value for the stake of Lavenue decreased by VND15 billion (USD 640 thousand).
(Akihide Mori, Vietnam watcher)