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VSC-Posco Steel is a joint venture established by four investors including Posco and Posco Processing & Service Co. Ltd. Among the four, Haiphong Steel and Mechanical Building Material JSC (Hascom), under a prime ministerial decision, was allowed to rent 60,094 sq.m to contribute capital to the company.
In a document sent to the Government Office and Haiphong’s relevant authorities, Posco Vietnam Holdings claimed that the Haiphong People’s Committee failed to issue the land use right certificate of the land for the joint venture.
“Despite our contacting with the relevant competent authorities, we have not been issued the land use right certificate of the land for fully implementing our legitimate rights. The construction works and assets attached to the land were established long time ago, but have not been duly recorded.”
VSC-Posco claimed it recently discovered by chance that Hascom had secretly applied for a land use right certificate for the land without consulting the joint venture.
Besides, on July 11, 2016, the Haiphong People’s Committee issued a decision allowing Hascom to extend the lease for the land. “Unfortunately the certificate was issued in the name of Hascom, while this land use right has been contributed by Hascom to the joint venture,” VSC-Posco stated in its complaint.
“The land lease extension and issuance of land use right certificate to Hascom instead of VSC-Posco Steel Corporation is contrary to directives of the prime minister and the laws of land, enterprises and investment.”
According to VIR’s sources, the final government decision could be released this month and published on the government’s website.
The VSC-Posco Steel Corporation’s $56 million plant in Haiphong began commercial operation in 2015, with a capacity of 240,000 tonnes per year. Ever since its establishment, the joint venture’s output and revenue have been on a steady trajectory of growth, from 13,000 tonnes and VND47.9 billion ($2.2 million) in 1995, to 3.5 million tonnes and VND2 trillion ($94 million) in 2014, respectively.