Most of Electricity of Vietnam's investments outside the utility's main business scope were ineffective, leading to huge losses, a new report said.
The utility, also known as EVN, has invested VND2.1 trillion (US$99.97 million), or 2.8 percent of its registered capital, into non-core businesses. The problem is most of its subsidiaries or companies in which it owns a stake were struggling, according to a report by a Party unit overseeing the state enterprise sector.
The report cited the case of EVN Telecom as an example, pointing out that the subsidiary posted a loss of more than VND1 trillion last year, after reporting no profit in 2009.
EVN is also a strategic shareholder of Ha Thanh Securities Co., whose losses amounted to VND111 billion as of June 30. The brokerage, with a capital of VND150 billion, is on the national securities authority's watch list.
According to figures provided in the report, EVN accounted for approximately 9 percent of the combined investment of Vietnam's state-owned enterprises into non-core sectors, only behind oil group PetroVietnam and Vietnam Rubber Group.
But unlike the other two companies, the power monopoly is facing huge losses.
The report of the Party unit said EVN may have cumulative losses of VND35 trillion by the end of the year. The figure does not include debts of VND11 trillion to oil and coal companies.