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|Quang Minh Corporation is not the only large debtor of Standard Chartered Vietnam that has defaulted on payments|
In 2013 Standard Chartered Vietnam and Standard Chartered Mauritius granted letters of short-term credit for Quang Minh Corporation JSC (at No.1 Thanh Nien street, Ba Dinh district, Hanoi) limited at $20 million.
Then they signed contracts of mortgaging goods, receivables, insurance contracts, as well as all of QMC’s accounts and deposits in banks to secure the loans. Standard Chartered Vietnam lent VND60.9 billion ($2.7 million) at the annual rate of 7.6 per cent first (later adjusted to 8.3 per cent), and an additional VND5.1 billion ($225,000). These debts expired in April 2015, but QMC has only paid VND290 million ($12,775) to date.
In 2015, Standard Chartered Mauritius also gave $5.1 million and $0.522 million to QMC. These two debts expired in early 2015 but QMC has only paid $4.2 million, while $1.3 million remains left to be paid.
At the first instance hearing, the representative of Standard Chartered Vietnam asked QMC to pay VND89.9 billion ($4 million) to offset its debt and interests. The bank did not wish to take collateral to recover the loans.
The representative of QMC acknowledged the loan Standard Chartered Vietnam claimed. However, the corporation has been facing many difficulties and is unable to pay the debts. QMC asked the bank for a grace period to collect the money, but could not give a timeline of payment, and affirmed that the company’s situation is still very difficult.
The court identified that the letter of credit is in line with regulations, the agreements are voluntary and valid for all parties, thus accepted Standard Chartered’s lawsuit.
QMC will have to return VND89.9 billion ($4 million) to repay the original debt and interest to Standard Chartered Vietnam and VND38.4 billion ($1.7 million) to Standard Chartered Mauritius. QMC has to pay over VND128 billion ($5.7 million) in total.
Quang Minh Corporation JSC produces agricultural products, feed for husbandry, as well as processes and trades in cooking oil with the brands Mr Bean, OilLa, and Soon Soon.
The corporation had the charter capital of VND989 billion ($43.6 million) in 2010 and produced several accomplishments as one of the 500 biggest businesses in Vietnam. Some banks used to grant letters of credit limited at trillions of dongs (around half a hundred million dollars) for QMC’s large projects.
However, QMC ran on a rough patch in 2015 after being named on the list of tax debtors. The corporation closed its website and kept quiet on the market since then.
Related to the unrecovered outstanding loans of Standard Chartered Bank, Binh Dinh Sugar (Bisuco) may also not be able to meet its debt obligations. This company is carrying VND800 billion ($35.56 million) in unsettled accounts to creditors, local farmers, its employees, and local tax authorities.
A couple of years ago, Standard Chartered Bank was reported by local media to have foreclosed a factory mortgaged by Bisuco, following the company’s failure to keep up with its loan payments.