Mai Linh Group, one of the largest taxi companies in Vietnam, may have to sell its assets to settle outstanding debts, threatening 6,000 staff with unemployment.
Nguyen Tuan Sinh, Head of Mai Linh Group's Trade Union (right) talks with a driver
In recent months, 28,000 employees of Mai Linh Group have lived in fear of the group's debts. "We only hope that the company will pay us our salaries and insurance," Nguyen Van Nam, a taxi driver said.
Ho Huy, Chairman of Mai Linh Group admitted that the company was in difficulties and they were trying to work it out.
The Mai Linh Group currently has debts with 800 individuals and organisations worth VND500 billion (USD24 million). Due to ineffective businesses of its subsidiary companies across the country, the group has incurred debts and is unable to pay the interest on the loans.
Huy said the group had asked to borrow VND500 billion from a low interest stimulus package. "If we can't get this support, we’ll have to sell our assets such as cabs, factories or offices and 6,000 employees may face unemployment." he said. "Our first priority is to pay our staff's wage. However, the staff may not receive Tet bonuses this year."
Due to the financial problems, the company still owes social insurance contributions. The HCMC Social Insurance Agency said that by the end of November, five subsidiary companies in HCMC owed VND38.7 billion.
In October, the Mai Linh Group proposed to HCMC authorities that they would pay VND2.2 billion a month so that the debt would be repaid by 2013, but the HCMC Social Insurance Agency refused the proposal.
The company’s five subsidiaries in HCMC have paid only VND470 millions and have no solid solutions to deal with the problem.
The Social Insurance Agency in District 7, HCMC has decided to take the matter to court in order to protect the company’s employee rights. The trial will start on December 28.
Nguyen Trong Nam, official of Social Insurance Agency said if Mai Linh Group did not pay the insurance, the employees may not receive their allowances and redundancy pay.