Bui Quang Huy is in trouble. The former CEO of tech company Nhat Cuong General Technical Services is wanted by police for smuggling and now money laundering. He apparently invested money earned from the smuggling of electronics across the border into a subsidiary company and used that to hide the fact that he was syphoning funds.
The story, here, tells of a corrupt and ambitious gathering of like minds. Eight arrests have been made so far, though the take is in the hundreds of millions of dollars, there seems to be a fervor for his arrest. He’s been missing since May.
This is unfortunate. Vietnam’s tech industry is booming. From fintech to cell-phone manufacturing to online payments, the place is on fire. There are currently half-a-dozen fintech investments alone in the country, with more on the way. Tech is huge in Vietnam, and its nascent startup sector is growing to. For there to be a major scandal like this in the tech industry is unfortunate in the extreme.
Though it’s less a story about tech than it is about corporate governance. The people in place to monitor the general director/CEO position were apparently some of those who have been arrested, including the CFO. That means that the monitoring system required by Vietnamese law, the board and the investigation committee, failed in their job. Or were party to the crimes.
What it means, unfortunately, to use that word again, is that corporate governance is not infallible. While Vietnam has gone a long way in improving its governance structures, and reporting requirements, if the people in the system aren’t doing their duty, then there will be problems.
And in Nhat Cuong, they weren’t doing their duty. Bui apparently kept dual ledgers to hide the funneling of trillions of dong through the companies he oversaw. That means the reporting oversight of the government, in the form of tax monitors and other financial watchdogs were unable to access the truth about revenue and cashflow. What the instigating incident that alerted authorities is, I don’t know, but it raises a question for Vietnamese governance. Is there enough? Is there a way to better monitor the situation? What duties were violated and is there a way to enforce their compliance?
Surely this will lead to issues taken up by the National Assembly and the stock markets.