On the afternoon of January 7, Mr. Luong Hoai Nam, Former General Manager of Jetstar Pacific Airlines, was immediately taken into custody upon his arrival at Noi Bai Airport. Two Australian Deputy GM's were not allowed to leave the country as well.
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| Jetstar Pacific’s former General Director (Photo: VNN) |
According to the initial reports, the Public Security Investigation Agency has accused him of irresponsibility leading to serious losses. He was arrested at around 3PM when his flight landed at Noi Bai airport. A search warrant was also issued to allow authorities into his home in Hanoi on the same day.
Jetstar Pacific Airlines (formerly Pacific Airlines) was established in 1991. Vietnam Airlines holds a majority of the shares. Pacific Airlines changed to Jetstar Pacifc Airlines when State Capital Investment Corporation (SCIC) sold 30 percent of its holdings, costing $50 million dollars to Qantas Airlines of Australia.
On November 2, 2009, the State Audit of Vietnam announced financial statement report in 2008 of SCIC. Relating to tasks of equitization, state capital management of Jetstar Pacific (SCIC holds over 70 percent of the shares), the State Audit of Vietnam carried out an investigation, uncovering many shortcomings.
In 2008, Jetstar Pacific had a loss of VND 546 billion (US$29million). Its equity capital by December 31, 2008 was minus 121 billion dong. Two Deputy General Managers who were in charge of petrol risk precautions in 2008 (Hedging) blatantly disobeyed rules and regulations on petrol budget management and they did not report to board of management, causing a serious loss of over US$ 31 million (from July 2008 to May 2009).
Business operations have been faced with many difficulties since its establishment, especially in 2008. However, Jetstar Pacific’s board of directors are still paid high salaries.
According to Le Minh Khai, Deputy General Director of the State Audit of Vietnam, the airline’s business losses were related to petrol and oil risk precautions in 2008. The petrol and oil prices in the world usually varied in 2008 and the Hedging contract of Jetstar Pacific lasted from July 2008 to May 2009.
Khai said, “The State Audit of Vietnam asked SCIC to take careful consideration of salary funds for board members and management of Jetstar Pacific Airlines since 2007. Then they have to make a report to Prime Minister Nguyen Tan Dung and the State Audit of Vietnam.”
Also, according to the audit results of Jetstar Pacific, the State Audit of Vietnam discovered that the total number of approved salary funds was over 1.4 trillion dong, however, this airline actually paid over 2.6 trillion dong, exceeding the approved number by nearly 1.2 trillion dong.
Luong Hoai Nam crossed paths with Jestar Pacific ever since the initial days of establishment. Before joining Jestar Pacific, he worked as the Chief of Planning and Marketing Department of Vietnam Airlines.
On September 1, 2009, he submitted his resignation to SCIC and was officially no longer part of this airline on November 9, 2009. Former General Director Luong Hoai Nam was prohibited from leaving Vietnam on December 16, 2009.
