HANOI: Seoul Court has issued a decision permitting the sale of the 72-storey tower of Keangnam Group in Hanoi to solve debt problems. Keangnam Group is facing a serious crisis and at risk of bankruptcy. According to Korean news agency Yonhap, the Seoul Central Court has turned the “green light” to sell the 72-storey building, owned by Keangnam Vina Company, a subsidiary of Keangnam Enterprises in Vietnam.
Earlier, the court had approved a plan to revive Keangnam Enterprises and two subsidiaries. Specifically, the court will take over the management to handle the debts (over $1 billion), due financial obligations and conduct restructuring. The biggest construction corporation in South Korea is now the center of a political scandal in this country.
According to the Seoul Central Court, the process of “revival procedures” largely depends on whether the corporation can sell its building in Vietnam as the Hanoi Landmark Tower is one of the biggest assets of Keangnam abroad. In early April, South Korean media brought up information on the sale of Keangnam tower in Vietnam, with the involvement of two large investors – Goldman Sachs and Qatar Investment Authority (QIA).
The South Korean media reported on May 14 that Qatar Investment Authority, a sovereign wealth fund, had agreed to buy Landmark 72 for $800 million and had gained exclusive rights for the ensuing negotiations. However, the next day, the media affirmed this was fake news. This incident caused a stir not only in Korea but also in Vietnam. A media representative of Keangnam Vina also confirmed that the information was false. Meanwhile, residents of Hanoi Keangnam Landmark sent written petitions to the authorities to reclaim VND160 billion (nearly $8 million) of maintenance fees.
According to local media reports, the management board of the tenement sent a document to Prime Minister Nguyen Tan Dung on May 8, reporting that several problems between the residents of Keangnam Hanoi Landmark Tower and its investor remained unsolved.
One major hitch was that the investor was facing financial difficulties and might not be able to pay them maintenance funds worth up to $7.62 million. They have grown particularly uneasy about this since the press reported that the building was put on the market earlier this year at a price of $800 million.
News website ttvn.vn said the company sold more than 900 apartments in the project in 2010 and extracted 2 percent of their combined value to use as a maintenance fund, in accordance with legal requirements.
The law also required the firm to refund the extracted amount to the residents immediately after a management board of the building was established. However, even after three years of the board’s establishment, this has not been done. “Once they finish selling [the building] and return to their home country, we will not know how to get back our money,” Doan Ky Thuy, a resident, told the website.
Meanwhile, the investor reportedly announced in an official document in March that the maintenance fund was valued at VND125 billion ($5.95 million), significantly lower than the residents’ estimate of VND160 billion. Deputy PM Hai has asked Hanoi authorities to investigate all the issues in accordance with existing regulations and deliver a report to the Government.
The 72-storey tower, also known as Landmark 72, is located in the capital’s South Tu Liem District and is the tallest building in Vietnam. Its apartments were sold in 2010 at prices around $3,000 per square metre. Keangnam Enterprises was once chaired by businessman Sung Wan-jong, who hanged himself from a tree on a mountain in April, following allegations of dirty dealings with the South Korean Government.
