On 22/7, 66-year-old Tan was tried in District 16 People's Court of Ho Chi Minh City (formerly Di An City) for failure to comply with a court order and tax evasion.
Also involved in the case, the wife and younger brother of the former chairman of Tan Tan Joint Stock Company (Tan Tan Company), Chau Ngoc Phung, 54, and Tran Quoc Tuan, 57, were prosecuted for failure to comply with a court order.
'I don't recall the enforcement of the judgment'
In court, when asked why he didn't comply with the court order, Tan explained that the company operated as a family business. His wife and younger brother were shareholders, but he was the one who managed all operations. During the period from 2013 to 2019, the company never held a shareholders' meeting.
"In 2019, Ms. Thanh convened a general meeting of shareholders and passed a resolution to remove me from my position, so I was unable to comply with the court order," Tan said.
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Tran Quoc Tan (center, in green shirt) with his younger brother and wife in court. Photo: Quoc Thang |
Tran Quoc Tan (center, in green shirt) with his younger brother and wife in court. Photo: Quoc Thang
The indictment states that on 5/7/2011, Tan signed a contract to transfer 3,666,666 of his personal shares to Nguyen Thi Thanh, 62, a resident of Ho Chi Minh City, for 36.6 billion VND (10,000 VND/share). The company then issued a share ownership certificate for 45.83% of the shares to Thanh.
On several occasions afterward, Thanh requested the board of directors to convene an extraordinary general meeting of shareholders to re-elect the board, provide information about business operations, and financial reports, but Tan did not comply. In November 2015, she filed a lawsuit with the Binh Duong Provincial People's Court.
On 27/9/2018, the court ordered the board of directors of Tan Tan Company (consisting of Tan, his wife, and his brother) to convene an extraordinary general meeting of shareholders to re-elect the board of directors in accordance with the law. The company, represented by Tan, was also ordered to allow Thanh access to and the right to excerpt company records, minutes, board resolutions, and periodic financial reports.
After the judgment took effect, on 14/6/2019, the Binh Duong Provincial Civil Enforcement Agency issued a decision to enforce the judgment. However, Tan, Phung, and Tuan did not comply despite having the means to do so. In September 2020, the agency issued a compulsory enforcement decision, but the three still did not comply. Seven months later, the Civil Enforcement Agency recommended prosecuting the three for failure to comply with the judgment.
To clarify Tan's actions, the judge asked him several questions about whether he had received or been aware of the compulsory enforcement decisions and the administrative penalty decisions related to the enforcement of the civil judgment. Tan replied, "I don't remember."
Phung testified that in 2019, she had authorized another person to execute the judgment, so she did not think the judgment had not been enforced. After the Civil Enforcement Agency forcibly auctioned off her shares, she only held 0.23% of the company's shares, so she could not convene a general meeting of shareholders.
Tuan admitted that his brother asked him to hold shares in his name and be a member of the board of directors. "I am aware of my responsibility to comply with the court order, so I ask the judge to consider reducing my sentence," Tuan said.
Tan Tan Company, located in Binh An ward, Di An City, had three shareholders. Tan owned 6,400,000 shares, representing 80% ownership; Phung and Tuan each held 10%. In its heyday, the company had over 140 distributors and over 40,000 retail outlets in most supermarkets and shopping malls, accounting for 80% of the domestic market share. Tan Tan products were also successfully exported to the US, Australia, China, Japan, Russia, Sweden, Taiwan, and Hong Kong.
Didn't pay taxes because 'creditors constantly came to my house and caused trouble'
Regarding the tax evasion charge, the indictment states that from July 2015 to November 2022, Tan leased out factory space and warehouses under his personal ownership in Binh Duc neighborhood, Binh Hoa ward, Thuan An City, Binh Duong Province (now Ho Chi Minh City), which was also the headquarters of Tan Tan Company, to various organizations and individuals.
Throughout this period, Tan is accused of only issuing cash receipts without issuing value-added tax invoices, not declaring, and not paying taxes as required by law. The total rental amount was over 8.6 billion VND, with nearly 1.5 billion VND in taxes owed.
Responding to the court's questioning, Tan paused, then explained that he "has been detained since February, so his health and memory are not good." However, he admitted to leasing the warehouse to Tan Tan Trading - Production - Cultivation Company (a subsidiary) without issuing invoices and not declaring the company's revenue, which violated the law.
"I was not in a position to pay taxes at that time because the company had its invoices revoked, and there was pressure from creditors constantly coming to my house and causing trouble," Tan explained.
Former Tan Tan peanut chairman faces nearly five years in prison
Presenting their view on the case, the People's Procuracy upheld the indictment and recommended that the judge sentence Tan to one year to one year and three months in prison for failure to comply with a court order and three years to three years and six months in prison for tax evasion, for a total sentence of four years to four years and 9 months.
Tuan faces a recommended sentence of six to 9 months in prison, but with a suspended sentence. Phung faces a recommended sentence of 9 to 12 months in prison.
After a day of trial, the court announced that the verdict would be delivered on 29/7.
Quoc Thang
