Investigators from the Ministry of Public Security on Wednesday pressed charges against a Hanoi construction firm which raised nearly US$17 million for a Hanoi urban area project that it had no authority to execute.
The May 1 Construction and Service Joint Stock Company was accused appropriating others' property, local newswire Vnexpress reported Thursday.
The construction group, Civil Construction Engineering Corporation (Cienco) No.5 under the Transport Ministry, authorized its real estate branch, Cienco 5 Land Development Corp., to work on the Thanh Ha urban area project.
Cienco 5 Land "sold" the authorization to May 1 Company for a loan of VND200 billion ($10.55 million).
The latter didn't have enough money when it was time to grant the loan, so Cienco 5 ended the contract on February 1. But May 1 still used the contract to raise funds for the project, Cienco 5 Land said.
In fact May 1 collected VND316 billion ($16.7 million) through 400 contracts with potential residents.
Than Lam, deputy director of Cienco 5 Land, was quoted by Vnexpress as saying Wednesday that his company has not promised to sell any piece of the project to anyone.
Nguyen Thi Kim Thoa, chief accountant of the May 1 company, said they are now negotiating with Cienco 5 Land to be allowed to go on with the project.
Anyone who had put money into the project but now wants to withdraw will be refunded, Thoa said.
The Thanh Ha urban area project includes two different sections covering nearly 389 hectares in total and is expected to cost more than VND8 trillion ($422 million) in total.