Vietnam real estate mogul denies tax accusation

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HAGL Joint-Stock Co., Vietnam's second-biggest listed real estate company, has rejected accusations that it tried to delay paying taxes worth nearly US$8 million, saying it had been given a deadline extension.

"I was so shocked that I even thought about firing anyone responsible if that were true," HAGL Chairman Doan Nguyen Duc said. "For me, it is a huge shame to be accused of trying to delay paying taxes."

"But my staff showed me the approval of the Gia Lai Province's Tax Department for the payment extension, and I also checked and found that we still had VND2.4 trillion ($115.4 million) in our account, so it's not their fault," he said.

According to the company, the provincial tax authority last year allowed it to extend the 2010 corporate income tax payment to the end of this March. The company is subject to a late payment penalty for the three-month period.

Nguyen Thi Ha, deputy director of the Gia Lai Tax Department, confirmed the approval with Vietweek.

Local media earlier this month cited officials of the General Department of Taxation as saying the sluggish real estate market has affected tax payments by some companies. They named HAGL, or Hoang Anh Gia Lai, as an example.

The officials also said that with unpaid taxes of around VND165 billion, the penalty that HAGL had to pay for the first two months alone was large. The penalty rate is 0.05 percent per day, or 18 percent a year.

Duc, one of the most high-profile businessmen in Vietnam, said it is unfair to criticize his company if the payment deadline has not passed yet.

He said the damage caused by the tax dodge accusation was serious. "Many shareholders, fund managers and partners kept calling me"¦ This kind of announcement can kill a company," he said.

Answering a question why the company needed to have the deadline extended despite the surplus in its account, Duc said the money was to be used for some business plans. "If we had not got the approval, we would have been willing to pay the tax anyway," he said.

"In these tough times, it's necessary to be cautious with comments that can hurt the reputation of businesses," he added.

Duc's stockholdings at the end of last year were valued at nearly VND4.35 trillion ($209.2 million), compared to the previous year's total of VND11.36 trillion. This still made him the second richest man on Vietnam's stock market.

Late last year Standard & Poor's Ratings Services lowered HAGL's long-term corporate credit rating from "B" to "B-" over concerns about its operating performance and liquidity.

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