Tang Minh Phung: The big family once aspired to become a real estate tycoon, entangled in labor

As the boss of a garment company with nearly 10,000 workers, he once held a trillion in his hands, but what made a person who should be a hero become a miserable failure?

Empty-handed made

Bai Khuong or Tang Minh Phung or Bai Phung were present on the streets of Lac Long Quan, Binh Thoi, 3 February... to get rid of the goods and was often punished by the beautiful traffic policeman. After blowing hard, the two became husband and wife.

Due to his passion for doing business and being helped by friends, Bai Phung started his business with a small sewing complex, then quickly developed into the largest chain of workshops in the city.

In the period of 1993-1996, people can see that Minh Phung Company emerged as a dynamic and powerful economic "corporation", affirming its prestige in the domestic and foreign markets. It is difficult to imagine that this is a private facility when visiting factories named Minh Phung - mainly processing garments and footwear for export. Up to 15 workshops, including 10 garment workshops, a plastic workshop, a cotton textile workshop, a PP packaging workshop, a fine art design workshop for garment goods and a computer design workshop. The scale of the peak time was over 9,000 employees.

At that time, many business directors were prosecuted for corruption, which started with acts of playing tricks, "hiring" lovers who are actors, using bear hands as nutritious food. But Tang Minh Phung is still loyal to the austere lifestyle, always present in the workshop, at noon there is always a loaf of bread, a bottle of spring water and three newspapers.

Real Estate Dream

Although it is very successful with processed garment orders, Minh Phung Company has switched to investing heavily in real estate.

Like many other businesses, Minh Phung wants to quickly seize the opportunity, accumulate as much land as possible, wait for the opportunity to sell at a higher price. From the beginning, Minh Phung has determined to invest on a large scale, insisting on not doing "baby stork" business, the overheated and invisible growth has turned Minh Phung into a wholesale company in real estate, houses, and land "heaven and earth".

Minh Phung jumped into the real estate business in 1992, even though at that time, Minh Phung's real estate business was considered completely illegal, because the business did not have a real estate business function.

By the beginning of 1997, in addition to factories in the garment and footwear industries, complete lines with thousands of sewing machines, Minh Phung's total real estate portfolio had up to 169 villas, houses and offices of all kinds; the system of concentrated factories and warehouses in industrial parks has 78 units with an area of over 1.2 million m2; special-use land of over 2.6 million m2. The above assets are distributed throughout Ho Chi Minh City. Ho Chi Minh City and the provinces of Ba Ria - Vung Tau, Binh Duong, Lam Dong... Minh Phung at that time was really a big investor in the real estate sector.

But this huge amount of assets is not thanks to the success of the business strategy or the company's own potential, but entirely from bank loans. In fact, the entire huge fortune in Minh Phung's name as soon as it was born, the certificates of use rights and ownership rights were immediately handed over to banks to lend capital for Minh Phung to create assets.

Due to overheated growth, in the period of 1993-1996, Minh Phung was in the position of "riding on the back of a tiger". Minh Phung is extremely difficult to maintain and develop the above huge asset, when the investment capital for the real estate business is increasing, bank loans are piling up, and the profitability from the asset cannot be obtained in a short time. There was no other way, Tang Minh Phung had to deceive banks to have capital to continue investing in land.

According to the regulations of the State Bank at that time, an enterprise was only allowed to borrow no more than 10% of its own capital, so Minh Phung established a series of subsidiaries, colluding with bank officials to use more than 40 legal entities to borrow capital. Up to the time of the case, Minh Phung has executed over 600 credit contracts with 7 banks, with a total outstanding debt of thousands of billions of VND and tens of millions of USD.

Mr. L.Q.L - Director of Ho Chi Minh City Management Department. Ho Chi Minh City, who questioned the source of capital, business efficiency and the risk of real estate investment from the bank capital of many businesses, including Minh Phung Company - said: "This Minh Phung hand is very confusing, I have never seen anyone love real estate like me...".

I am fascinated, but recently looking back, many experts have seen Tang Minh Phung's foresight on the future of the real estate industry. At that time, Minh Phung only hoped to sell the house and land to pay debts and bank interest.

Along with the rapid cooling of the real estate market, the tightening in lending, credit guarantees, along with the adjustment of land policies..., Minh Phung Company is in danger when it can no longer afford to pay bank interest...

On March 24, 1997, the Chairman of the People's Procuracy of Ho Chi Minh City. Ho Chi Minh City issued a decision to prosecute and temporarily detain Tang Minh Phung and many others. Searching Tang Minh Phung's house, the investigating agency did not find any valuable private property. Tang Minh Phung said that all his own money and loans were concentrated in Minh Phung Company.

That is an issue that is still controversial to this day

In fact, when handling collateral later, it shows that the lists of collateral such as factories and warehouses in industrial parks are quite expensive, with a lease period of about 40-50 years, only the exploitation money with banks has collected hundreds of billions of VND.

For assets that are villas, offices, and factories in the Ho Chi Minh City area. Most of the actual selling prices are much higher than the price set by the court at the time of trial. Particularly for the land plots that Tang Minh Phung has set up projects in the former Thu Duc area (now in District 2), according to the planning of Ho Chi Minh City. Most of these are located in very prime locations, the profit will certainly be very large...

Many experts say that Tang Minh Phung has taken steps too early, too hasty, outside the laws of the market and has limitations in economic and legal awareness, so he received such a tragic result.

On the human side, although he has laid down (he died in 2003), Tang Minh Phung still retains the affection of acquaintances with loyalty, enthusiasm, and no harm.

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