<Bài viết đã được chỉnh sửa lúc 2007-08-16 23:36:00Ngọc Lý>
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How Vietnam Venture Proved a Costly Move
Hanoi Can Be Tough On Foreign Investors; One Man's Jail Ordeal
By JAMES HOOKWAY
The Wall Street Journal,
August 14, 2007
HANOI, Vietnam -- When American businessman Hoan Nguyen came to Vietnam a decade ago with plans to build an international school, he says he was bright-eyed with hope for the country of his birth.
But by last year he was lying on a damp bench in Hanoi's B14 prison after a business dispute with his Vietnamese government partners turned into a police investigation with Mr. Nguyen as the key suspect.
Mr. Nguyen's travails highlight one of the big risks for the foreign investors who have been flocking to Vietnam, whose economy has been growing at more than 8% a year and which is widely regarded as the developing world's hottest emerging market after China and India. It also shows how Vietnamese government agencies or officials can sometimes employ tough tactics to get what they want when a deal goes wrong.
In jail for 14 months while investigators probed the case, Mr. Nguyen listened to Vietnamese state radio booming in the prison's courtyard each morning as announcers exhorted overseas Vietnamese to come home to fuel the country's rapid economic growth.
"It was so ironic. I did exactly what the government wanted and I ended up in jail," says the 58-year-old Mr. Nguyen, who was released in June and is now in Hanoi awaiting the final resolution of his case.
While in prison, Mr. Nguyen says he was given access to a lawyer only twice during his detention and alleges he was once beaten by a police officer. Food was meager. At Vietnamese New Year, he says, he was allowed a little chunk of chicken with his once-a-day portion of rice. Police officials declined to comment on Mr. Nguyen's detention.
Then, after Mr. Nguyen had spent 14 months behind bars without charges and his family paid $85,000 in what they were told was bail, Vietnamese police concluded in their initial report there wasn't sufficient evidence to prosecute him and let him go. The bail money hasn't been returned. Mr. Nguyen is still waiting for Vietnamese prosecutors to formally decide if they will charge him with any offense.
After decades of Communist rule, Vietnam's legal system is still ill-equipped to handle civil business disputes that would be routinely handled by independent regulators in other nations with well-established market economies.
So without recourse to civil courts, complainants can take their grievances directly to the police, who can detain suspects for months without filing charges against them. In other instances, the government has used its authority to seize private businesses, leaving their owners little prospect of redress in the courts.
Tony Foster, the managing partner of the Vietnam practice of U.K.-based legal firm Freshfields Bruckhaus Deringer, says one of the idiosyncrasies of Vietnamese legal code -- a hodgepodge of indigenous and imported regulations -- is that it includes some very broad definitions of crimes, which can easily be applied to a business setting.
One is the crime of "economic mismanagement" resulting in losses to the state. Mr. Foster says that a foreign business engaged in a joint venture with a state-owned agency could face criminal prosecution if it stumbles over a simple administrative step in a politically charged case.
Vietnamese President Nguyen Minh Triet acknowledged in a recent interview that his country needs to amend its legal system to bring it more in line with international standards. But people familiar with Vietnam's legal-reform effort say it will take considerable time. The reform drive has already been under way for several years, focusing, among other things, on leveling the playing field between foreign and local businesses.
In the meantime, business disputes and regulatory violations that are treated as crimes keep piling up.
Last year, four local traders at the Vietnam branch of Dutch bank ABN Amro Holding NV were arrested after Vietnamese police accused them of conducting a series of foreign-exchange trades with an unauthorized trader at a state bank, in which the government lost $5 million. ABN Amro paid the Vietnamese government $4.5 million in November in an effort to get its staff released; the four bankers are now free to work and travel within the country. But the investigation into the actions of the ABN Amro staff hasn't yet been dropped. Previously, an ABN Amro spokeswoman has denied any wrongdoing by its traders in Vietnam.
Other foreign banks protested the police actions in a letter to the government, complaining that under Vietnamese law it is too easy to criminalize ordinary civil disputes.
A government audit this year concluded that Vietnamese banks don't adequately regulate their foreign-exchange trading.
Expatriate ethnic Vietnamese who have returned to join the country's march away from a centrally planned economy have fared worse than most other foreign investors. Many, including Mr. Nguyen, complain their legal situation is compromised because the state is reluctant to regard them as foreigners, even though they are legally citizens of other countries. For example, one of reasons the police held Mr. Nguyen in prison for more than a year, according to people closely following the case, was to investigate whether he illegally received medical insurance reserved for foreign employees of the Hanoi International School he helped set up -- overlooking that Mr. Nguyen is a U.S. citizen.
To be sure, some overseas Vietnamese appear to have flouted the country's laws in their effort to make their fortunes, damaging the reputation of other overseas Vietnamese -- or Viet Kieu -- who have returned to engage in legitimate businesses. In one well-known case, French businessman Nguyen Gia Thieu built a business with his brother selling Nokia and Samsung mobile phones. In 2003, police arrested Mr. Thieu for allegedly smuggling the phones into Vietnam to avoid import duties. He was later convicted and sentenced to 20 years in prison.
Mr. Nguyen, meanwhile, is still fighting to clear his name.
An energetic man with a thick mop of gray hair and degrees from Vanderbilt and George Mason universities in the U.S., Nguyen Dinh Hoan left Vietnam in the 1960s and didn't return for decades because of war and political upheaval there. Like many overseas Vietnamese, he reversed his name to follow Western practices, and became known as Hoan Nguyen.
In 1995, he finally returned with plans to establish an international school to cater to the families of the foreign expatriates who were then beginning to flock to the country. Mr. Nguyen formed the Hanoi International School in partnership with the Vietnamese government's Center for Education in 1996. The government provided a 20% lease on a now-valuable plot of land in booming downtown Hanoi in return for a 30% stake in the venture.
As the value of the land on which the school is built rose, tensions between Mr. Nguyen and his partners also grew. In April 2006, police arrested Mr. Nguyen as part of their investigations into the government partner's claims that he illegally received medical insurance, and into his allegedly improper hiring of a personal assistant to help him in a separate English-language teaching business, police investigators said in their report.
While Mr. Nguyen was in prison, U.S. Embassy officials in Hanoi warned Mr. Nguyen's wife in the U.S. against visiting Vietnam to try to help obtain her husband's release because they couldn't guarantee her safety here, family members say.
Ho Ngoc Dai, former director of the government's Center for Education, the school's partner, and a son-in-law of a former Communist Party chief, called Mr. Nguyen "a thief" but refused to explain why he believes Mr. Nguyen is a criminal and declined to discuss the matter further.
Mr. Nguyen maintains he did nothing wrong -- and that the salary payments to his personal assistant were split between the school and himself.
In June, after Mr. Ngyuen's release, his case ended up on the desk of Vietnam's prime minister, Nguyen Tan Dung, a former central-bank chief with a reputation for straight-shooting. He instructed the Vietnamese members of the school's board to resolve its disputes with Mr. Nguyen, failing which the government would impose its own solution, the state-run People's Police newspaper reported.
Write to James Hookway at [email=james.hookway@awsj.com]james.hookway@awsj.com[/email]
> online.wsj.com/article/SB118702662210596089.html
How Vietnam Venture Proved a Costly Move
Hanoi Can Be Tough On Foreign Investors; One Man's Jail Ordeal
By JAMES HOOKWAY
The Wall Street Journal,
August 14, 2007
HANOI, Vietnam -- When American businessman Hoan Nguyen came to Vietnam a decade ago with plans to build an international school, he says he was bright-eyed with hope for the country of his birth.
But by last year he was lying on a damp bench in Hanoi's B14 prison after a business dispute with his Vietnamese government partners turned into a police investigation with Mr. Nguyen as the key suspect.
Mr. Nguyen's travails highlight one of the big risks for the foreign investors who have been flocking to Vietnam, whose economy has been growing at more than 8% a year and which is widely regarded as the developing world's hottest emerging market after China and India. It also shows how Vietnamese government agencies or officials can sometimes employ tough tactics to get what they want when a deal goes wrong.
In jail for 14 months while investigators probed the case, Mr. Nguyen listened to Vietnamese state radio booming in the prison's courtyard each morning as announcers exhorted overseas Vietnamese to come home to fuel the country's rapid economic growth.
"It was so ironic. I did exactly what the government wanted and I ended up in jail," says the 58-year-old Mr. Nguyen, who was released in June and is now in Hanoi awaiting the final resolution of his case.
While in prison, Mr. Nguyen says he was given access to a lawyer only twice during his detention and alleges he was once beaten by a police officer. Food was meager. At Vietnamese New Year, he says, he was allowed a little chunk of chicken with his once-a-day portion of rice. Police officials declined to comment on Mr. Nguyen's detention.
Then, after Mr. Nguyen had spent 14 months behind bars without charges and his family paid $85,000 in what they were told was bail, Vietnamese police concluded in their initial report there wasn't sufficient evidence to prosecute him and let him go. The bail money hasn't been returned. Mr. Nguyen is still waiting for Vietnamese prosecutors to formally decide if they will charge him with any offense.
After decades of Communist rule, Vietnam's legal system is still ill-equipped to handle civil business disputes that would be routinely handled by independent regulators in other nations with well-established market economies.
So without recourse to civil courts, complainants can take their grievances directly to the police, who can detain suspects for months without filing charges against them. In other instances, the government has used its authority to seize private businesses, leaving their owners little prospect of redress in the courts.
Tony Foster, the managing partner of the Vietnam practice of U.K.-based legal firm Freshfields Bruckhaus Deringer, says one of the idiosyncrasies of Vietnamese legal code -- a hodgepodge of indigenous and imported regulations -- is that it includes some very broad definitions of crimes, which can easily be applied to a business setting.
One is the crime of "economic mismanagement" resulting in losses to the state. Mr. Foster says that a foreign business engaged in a joint venture with a state-owned agency could face criminal prosecution if it stumbles over a simple administrative step in a politically charged case.
Vietnamese President Nguyen Minh Triet acknowledged in a recent interview that his country needs to amend its legal system to bring it more in line with international standards. But people familiar with Vietnam's legal-reform effort say it will take considerable time. The reform drive has already been under way for several years, focusing, among other things, on leveling the playing field between foreign and local businesses.
In the meantime, business disputes and regulatory violations that are treated as crimes keep piling up.
Last year, four local traders at the Vietnam branch of Dutch bank ABN Amro Holding NV were arrested after Vietnamese police accused them of conducting a series of foreign-exchange trades with an unauthorized trader at a state bank, in which the government lost $5 million. ABN Amro paid the Vietnamese government $4.5 million in November in an effort to get its staff released; the four bankers are now free to work and travel within the country. But the investigation into the actions of the ABN Amro staff hasn't yet been dropped. Previously, an ABN Amro spokeswoman has denied any wrongdoing by its traders in Vietnam.
Other foreign banks protested the police actions in a letter to the government, complaining that under Vietnamese law it is too easy to criminalize ordinary civil disputes.
A government audit this year concluded that Vietnamese banks don't adequately regulate their foreign-exchange trading.
Expatriate ethnic Vietnamese who have returned to join the country's march away from a centrally planned economy have fared worse than most other foreign investors. Many, including Mr. Nguyen, complain their legal situation is compromised because the state is reluctant to regard them as foreigners, even though they are legally citizens of other countries. For example, one of reasons the police held Mr. Nguyen in prison for more than a year, according to people closely following the case, was to investigate whether he illegally received medical insurance reserved for foreign employees of the Hanoi International School he helped set up -- overlooking that Mr. Nguyen is a U.S. citizen.
To be sure, some overseas Vietnamese appear to have flouted the country's laws in their effort to make their fortunes, damaging the reputation of other overseas Vietnamese -- or Viet Kieu -- who have returned to engage in legitimate businesses. In one well-known case, French businessman Nguyen Gia Thieu built a business with his brother selling Nokia and Samsung mobile phones. In 2003, police arrested Mr. Thieu for allegedly smuggling the phones into Vietnam to avoid import duties. He was later convicted and sentenced to 20 years in prison.
Mr. Nguyen, meanwhile, is still fighting to clear his name.
An energetic man with a thick mop of gray hair and degrees from Vanderbilt and George Mason universities in the U.S., Nguyen Dinh Hoan left Vietnam in the 1960s and didn't return for decades because of war and political upheaval there. Like many overseas Vietnamese, he reversed his name to follow Western practices, and became known as Hoan Nguyen.
In 1995, he finally returned with plans to establish an international school to cater to the families of the foreign expatriates who were then beginning to flock to the country. Mr. Nguyen formed the Hanoi International School in partnership with the Vietnamese government's Center for Education in 1996. The government provided a 20% lease on a now-valuable plot of land in booming downtown Hanoi in return for a 30% stake in the venture.
As the value of the land on which the school is built rose, tensions between Mr. Nguyen and his partners also grew. In April 2006, police arrested Mr. Nguyen as part of their investigations into the government partner's claims that he illegally received medical insurance, and into his allegedly improper hiring of a personal assistant to help him in a separate English-language teaching business, police investigators said in their report.
While Mr. Nguyen was in prison, U.S. Embassy officials in Hanoi warned Mr. Nguyen's wife in the U.S. against visiting Vietnam to try to help obtain her husband's release because they couldn't guarantee her safety here, family members say.
Ho Ngoc Dai, former director of the government's Center for Education, the school's partner, and a son-in-law of a former Communist Party chief, called Mr. Nguyen "a thief" but refused to explain why he believes Mr. Nguyen is a criminal and declined to discuss the matter further.
Mr. Nguyen maintains he did nothing wrong -- and that the salary payments to his personal assistant were split between the school and himself.
In June, after Mr. Ngyuen's release, his case ended up on the desk of Vietnam's prime minister, Nguyen Tan Dung, a former central-bank chief with a reputation for straight-shooting. He instructed the Vietnamese members of the school's board to resolve its disputes with Mr. Nguyen, failing which the government would impose its own solution, the state-run People's Police newspaper reported.
Write to James Hookway at [email=james.hookway@awsj.com]james.hookway@awsj.com[/email]
> online.wsj.com/article/SB118702662210596089.html