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HDI Global SE – a Germany-based corporation and the majority shareholder of Vietnamese non-life insurer PVI – has been fined for non-compliance with information disclosure and foreign ownership limit rules

VIR reported that on April 16 the State Securities Commission (SSC) fined HDI Global SE due to non-compliance with information disclosure and violating foreign ownership limit rules.

Specifically, a fine of VND125 million ($5,435) is stipulated in Article 28.2 of Decree No.108/2013/ND-CP dated September 23, 2013 on administrative penalties for violations in the securities market for performing one or more transactions in order to conceal real ownership of a security in order to avoid the obligation to disclose information in accordance with regulations.

The fine imposed on HDI is not a considerable amount. However, the SSC’s official decision to require HDI to transfer PVI shares back to their original owners to reduce its ownership ratio has raised tough questions among investors.

In accordance with Article 28.3b of Decree 108, PVI has to comply with the SSC’s requirement within 60 days of receiving the decision.

Many investors have asked how HDI will sell these shares and how it will change PVI’s management structure.

Currently, the foreign ownership limit in PVI has been raised to 100 per cent, but no single investor is allowed to own more than 50 per cent of the stakes. This raises questions whether HDI will find an insider to negotiate the number of shares that it must sell.

The story of HDI’s acquisition of PVI was also mentioned by a German newswire, Handelsblatt Today .

“Insurer HDI Global is facing unexpected legal problems due to its business expansion strategy in Asia. The subsidiary of the Talanx Group has been trying for years to bolster its influence in PVI – one of the largest insurance groups in Vietnam. However, regulators in the Southeast Asian country are now accusing the Hanover-based company of using unfair approach,” Handelsblatt Today noted. “In this particular case, the question is whether HDI has raised its stake in the Vietnamese insurer to more than 50 per cent in the former state-owned PVI in an inadmissible manner. From the point of view of the Vietnamese financial regulator SSC, HDI’s actions have violated local securities law.”

Jens Holger Wohlthat, member of the Board of Management of HDI Global SE, Hannover, also the chair of PVI’s board for 2017-2022 tenure, effective since January 16, 2020

On the other hand, HDI remains adamant that its investment in Vietnam is strictly compliant with Vietnamese regulations.

“ HDI confirms that its compliance with the local laws always remains its priority. HDI affirms that with respect to HDI’s investment activities in Vietnam, prior to making any transactions, the company always reviews and assesses the local regulations, to ensure that HDI’s investments in Vietnam are strictly compliant with Vietnamese regulations,” a representative of HDI Global SE previously said. “HDI has transparently provided its explanations and has been working closely with the SSC as well as other Vietnamese agencies regarding issues presented in OL 4513 and OL 5106 of the SSC within the required period by the SSC. HDI is convinced that we have complied fully with the laws and regulations of Vietnam and we intend to vigorously defend this position.”

“HDI trusts that the Vietnamese Government will provide judicious guidance to ensure the stability and legal safety for the investment activities of HDI in particular and those of foreign investors in general. HDI once again is committed to working closely with the Government of Vietnam, and especially with Vietnam Oil and Gas Group, to ensure that the relationship is effective and constructive, thus ensuring a significant contribution to the good trade relations between Vietnam and the Federal Republic of Germany,” the representative replied in an email response to VIR .

By Lam Tien

Bùi Sỹ Lợi, vice chairman of the National Assembly’s Committee for Social Affairs. — Photo danviet.vn

Bùi Sỹ Lợi, vice chairman of the National Assembly’s Committee for Social Affairs, talks to Dân Việt newspaper about the advantages and disadvantages of the new points in the draft proposal to develop the amended Law on Social Insurance by the Ministry of Labour, Invalids and Social Affairs.

What do you think about the implementation of the Law on Social Insurance over the years?

The implementation of social insurance policies in general and the Law on Social Insurance 2014 in particular is quite good. However, it still reveals shortcomings.

The proportion of people participating in compulsory social insurance is low and the number of voluntary participants is not high. By 2020, only 33.5 per cent of working-age people were taking part in social insurance. Nearly 32 million people of working age (about 66.5 per cent) have not participated.

The maternity and sickness policies for labourers also have many shortcomings. In order to reach the target of 60 per cent of people taking part in social insurance by 2030, it is necessary to have basic solutions for policies and implementation.

Therefore, the amendment and supplementation of the Law on Social Insurance by the Ministry of Labour, Invalids and Social Affairs (MoLISA) is necessary.

One of the new points in the draft revised Law on Social Insurance is to reduce the minimum number of years of social insurance payment from 20 to 10. What do you think about this?

The implementation of this is to comply with Resolution 28 of the Central Government on reforming social insurance policies.

The MoLISA proposes to amend the conditions for pension entitlement, in the direction of gradually reducing the number of years of social insurance payment from 20 years to 15, and eventually 10 years, creating conditions for elderly employees with a low number of years participating in social insurance to enjoy benefits.

Of course, people will enjoy low benefits with a low number of years of payment.

Therefore, policy makers need to calculate carefully to create a balance in social insurance payment and benefits, ensuring employees will enjoy a minimum pension.

The draft proposal also mentions the expansion of the group of beneficiaries of compulsory social insurance. Is this really necessary?

The number of people participating in compulsory social insurance is still low, such as foreign workers, those with labour contracts lasting from one to three months and Vietnamese employees working abroad. These account for less than 50 per cent of the employees who have a labour contract.

Therefore, there are some concerns about the expansion of the group of people paying compulsory social insurance to individual business households, workers in cooperatives. They think this is not feasible.

In my opinion, this is completely feasible because we are moving towards achieving the goal of all people participating in the social insurance system, including compulsory and voluntary social insurance. Therefore, people in the group of compulsory social insurance that fail to join the system will be handled according to the provisions of law.

Additionally, it is also necessary to have solutions to attract more working-age people to sign up for voluntary social insurance to get benefits when they retire.

What is the newest point and highest human value in this draft revised Law on Social Insurance?

I think the newest and most humane point is the drafting board proposes to amend the law that all people can participate in social insurance, so that all employees have a pension. The law should be easily applied to facilitate implementation in order to best serve people. — VNS

Pham Van Trieu has spent the past three decades traveling throughout rural Vietnam to share the gift of education with impoverished children in remote villages.

Over 30 years ago, Pham Van Trieu set out on a journey into Vietnam’s Central Highlands with one goal in mind: spread the gift of education to children who might otherwise have never seen the inside of a classroom.

Venturing into the mountains and through dense forests into remote regions where education was practically inaccessible, the 55-year-old teacher form the central province of Quang Ngai began offering primary education to needy children.

Of course, teaching in far flung mountain villages came with challenges that extended beyond classroom walls.

Just making it from his small house to the village center required a difficult trek along complicated walking paths and, as the bulk of his food supply came from vegetables he’d pick in the forest, severe rains could mean days without food.

“As long as my efforts help people, I won’t stop trying,” he said.

Trieu eventually settled down in a small village in the central Vietnam’s meadow of Bui Hui and began teaching the alphabet to local children in a small, makeshift classroom built by the villagers.

Pham Van Trieu boils water for tea in his house in central Vietnam’s province of Quang Ngai. Photo: T. Mai / Tuoi Tre

Trieu now lives a simple life in a narrow room adjacent to the classroom, relying mostly on instant noodles for substance, an old tea pot for hot water, and a rusty motorbike that’s been with him through all his ups and downs.

“Thanks to this little fellow, I feel less lonely,” Trieu said, gesturing to the worn out motorcycle.

The 55-year-old teacher said that he occasionally considers returning home to experience better living conditions but quickly reminds himself that, without an education, the children who depend on him face a bleak and uncertain future.

“I will continue try my best to teach these children no matter how difficult it becomes,” Trieu shared.

Staying in the villages as garnered him significant praise for his willingness to sacrifice his personal happiness to help children get the proper education the need to make it in the modern world.

“Our country needs more people like Trieu because there is still a serious need for help across Vietnam, especially in poor regions,” said Nguyen Minh Hai, the head teacher of a high school in Quang Ngai.

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An April afternoon, Nguyen Hoang Diep, 60, crosses Hoang Sa Street in Binh Thanh District to take a walk along the Nhieu Loc – Thi Nghe Canal.

Aside from physical exercise, Diep enjoys the fresh, cool air by the canal, a rare experience in the past.

“Around 20 years ago, I could detect the pungent odor from my house, stood 30 meters from the canal. Back then, no one could imagine that one day the canal could become this clean and beautiful,” she said.

Nhieu Loc – Thi Nghe Canal in 2021. Photo by VnExpress/Quynh Tran.

A life-long neighborhood resident, Diep has witnessed the canal, which joins the Saigon River, change over many years.

As a child, Diep used to swim in the canal with her friends, its water so clear you could spot passing fish. Some locals even took water from the canal for daily use.

But after 1975, with rapid urban development, thousands of houses and buildings had gone up along both sides of the canal, seriously encroached on by expanding construction projects.

Without a proper drainage system, the canal soon became heavily polluted with domestic trash and wastewater from production facilities.

“Families still using canal water for cooking or drinking saw their kids repeatedly suffer intestinal problems. Those who could afford property in other areas moved out, leaving poor households behind in their wake.”

Three kilometers away, Ly Hong Dao, 51, who lives in an alley next to Tran Khanh Du Bridge of Phu Nhuan District, remembers clearly the time when Nhieu Loc-Thi Nghe was “intruded upon without restraint.”

One after another, homes were enlarged, makeshift structures built that jut out over the water, piled deep with garbage.

Some residents raised poultry or pigs, with all associated waste discarded into the canal, she said.

What’s worse, textile and garment dyeing workshops were also dumping wastewater straight into it.

Over the years, the canal water turned black, exuding a terrible odor.

“Those days, I could never dream the canal could ever become as clean as it is now,” Dao said.

Nhieu Loc – Thi Nghe Canal runs nearly nine kilometers (six miles) through Districts 1, 3, Phu Nhuan, Tan Binh and Binh Thanh.

The city had first planned to restore the canal in the 1990s, but due to financial issues, the project was postponed.

Then in 2002, via a World Bank (WB) fund of more than VND8.6 trillion ($374 million), the city eventually launched a master project to upgrade the entire waterway.

More than 7,000 families with 50,000 people were relocated before the construction of a sewer system of 8.9 kilometers, meant to transfer wastewater from production facilities, 70 kilometers of smaller sewers to collect domestic wastewater, and a wastewater pumping station in Binh Thanh District.

All wastewater is now transferred to one district facility for treatment before discharged into the Saigon River via the pumping station.

The project also saw 1.1 million tons of mud dredged from the canal bed and the construction of concrete embankments.

Dredding on the Nhieu Loc – Thi Nghe Canal, September 2011. Photo by VnExpress/Huu Cong.

The city in 2011 had also spent more than VND550 billion of its own budget upgrading and expanding 15 kilometers of Hoang Sa and Truong Sa streets.

The project helped improve the living conditions of 1.2 million people across districts 1, 3, 1, Phu Nhuan, Tan Binh, Binh Thanh and Go Vap and mitigate the impacts of flooding.

Following the Nhieu Loc – Thi Nghe initiative, HCMC renovated several other canals suffering encroachment, garbage pollution, and wastewater discharge.

Overall, several cleanup efforts were commenced before a grand resurrection project worth more than $200 million with support from the World Bank was initiated between 2003 and 2012.

Canals marked for upgrade included Tan Hoa – Lo Gom, Tau Hu – Ben Nghe, and Kenh Doi – Kenh Te.

The project to upgrade Tan Hoa – Lo Gom Canal that flows nine kilometers through districts Tan Binh, Tan Phu, 11 and 6 cost more than VND5 trillion ($218 million), including $129 million funded by the WB, and took three years.

The project relocated 1,500 families, built 12 bridges, a 11.5-kilometer road along the canal, and a sewer system of more than 2.5 kilometers.

Tan Hoa – Lo Gom Canal in 2021. Photo by VnExpress/Quynh Tran.

As decided last week, the city would execute a master plan to renovate Tham Luong-Ben Cat-Nuoc Len Canal, flowing through seven districts – 12, Binh Tan, Tan Phu, Tan Binh, Go Vap, Binh Thanh, and Binh Chanh, within this year to counter urban flooding and improve waterway transportation.

Set to be completed by 2025, it will build concrete embankments and roads that run 33 kilometers (20.5 miles) along the canal, relocate a number of households, dredge the entire water body, rebuild or repair sewer systems, and build 12 docks.

All work is expected to cost VND8.2 trillion ($356 million), of which VND4 trillion will be sourced from the central budget and the rest from HCMC’s own coffers.

The project is expected to reduce pollution, improve drainage and prevent flooding in the seven districts served by the canal. It would also improve waterway transportation between HCMC and Mekong Delta as well as the neighboring provinces of Binh Duong and Dong Nai. This, in turn, would ease traffic jams on a number of highways.

“Dredging and embellishment of canals is a fundamental and sustainable solution to improve the face of the urban area and deal with flooding and pollution in the city,” said Le Hoang Chau, chairman of the Ho Chi Minh City Real Estate Association,

The southern metropolis has about 170 canals that stretch nearly 700 kilometers. It allocates about VND1.1 trillion ($47.4 million) to maintain its drainage system and VND2.8 trillion (about $120 million) to collect garbage each year, according to the municipal finance department.

HDBank will choose a life insurance partner for an exclusive bancassurance deal

At the bank’s general shareholders meeting in April, HDBank’s vice chairwoman Nguyen Thi Phuong Thao said that the bank has received a lot of attention recently for an exclusive bancassurance agreement.

“Many international life insurance companies have offered to cooperate with HDBank, but the negotiation has not been completed due to the pandemic,” said Thao. “However, we are not under any pressure to sign an exclusive bancassurance deal at the moment because the contract value in 2021 or next year would be significant.”

Last year, some major lenders have entered the bancassurance competition by co-operating with life insurers. For instance, ACB inked a monopoly deal with Sun Life and VietinBank teamed up with Manulife.

Despite the adverse impacts of the pandemic, the bank reported its pre-tax revenue of VND5.818 trillion($252.96 million) last year, equivalent to an increase of 15.9 per cent on-year.

In the first quarter of this year, HDBank recorded VND2.1 trillion ($91.3 million), up more than 68 per cent on-year.

The bank is accelerating its digitally-led services with its “Di HDBank” application. Moreover, a majority of the bank’s customers have conducted online transactions on the HDBank digital banking platform via its Electronic Know Your Customer (eKYC) implementation.

Pham Quoc Thanh, general director of HDBank, said that since the last quarter of 2020, the bank has reinforced insurance cross-selling initiatives, with many positive performances in return. The bank sets a target this year to collect VND1 trillion ($43.5 million) of insurance service fees.

“Revenue from insurance services is an attractive promise for us in order to diversify our sources of income while reducing reliance on revenue from lending activities,” added Thanh.

By Lam Tien