When moguls are out of cash VietNamNet Bridge - One of the hottest topics on newspapers these days is related to the tragic situation of moguls. The real estate market has been frozen for almost two years. Phuoc Sang, a famous film producer and businessman, was accused by his friend, who is also a businessman, of borrowing him several hundreds of thousands of USD but neglecting to pay back. Sang explained to newspapers that his money is stuck in real estate so he cannot pay the debt right now. Some patrons of football teams, who are famous moguls, because of business difficulties, claimed to stop investing in football. Some of them are accused of not paying salary for players for several months. Previously, these bosses spent millions of USD each year in their football teams. In fact, these are not isolated stories because tens of thousands of businesses have gone bankrupt in Vietnam this year. However, these entrepreneurs had no connection to football or the showbiz, so they were neglected. Real estate "iceberg" crushes moguls Five years ago, Hoang was known as a very rich businessman. His started business with mechanical products. His products used to be sold at home and abroad. That day, Hoang was the “dream” and “model” of many people because at the age of 40, he had assets worth dozens of million USD. When Bentleys were still quite rare in Hanoi, Hoang bought this supercar, which was priced nearly a million USD. An employee of Hoang said that every Lunar New Year, Hoang’s family traveled abroad, to Asia, Europe, etc.. It would have nothing to say if Hoang did not invest in real estate. If he only focused on one or two projects, he could have earned a lot of money because in 2008 - 2009, when the real estate market was at the top. But perhaps he was too confident in his ability, so Hoang continued to invest in a dozen of real estate projects in Cau Giay, Ha Dong, Hoang Mai, Thanh Xuan districts. He also set up an industrial park project in of several hundreds of hectares in Hanoi’s suburbs. With a lot of projects, Hoang’s capital of a few hundred billion dong was not enough. He had to mobilize capital from people who wished to buy an apartment and from secondary investors. More clearly, he sold apartments on paper through the so-called "capital contribution contracts" or "loan contracts," and the mortgaged property were his projects, which were not approved or implemented yet. It would be no problem in 2009 – 2010, the golden time of the real estate market. But when the estate market dropped since then and is frozen now, Hoang’s projects are idle. Customers and secondary investors turned to ask for their money back. Hoang had to sell his Bentley and assets to pay debts. His office was moved from Hanoi’s center to the suburbs. Being hunted by creditors, how long can this boss sustain? But, in the real estate business, Hoang’s case is not special. In the golden time of the real estate market, only with a land relocation decision, the estate investor could easily earn a lot of money. Therefore, many estate firms were established. As a former official of a State-owned construction firm, who earned a lot of money from the stock market during its golden time in 2007 – 2008, Van and several friends opened a real estate joint stock company. These people were confident that they would be successful because they were experts of construction who were very familiar with administrative procedures. The first project was a joint venture with another company to build condominiums. At first, Van was fairly confident that the company would become famous very soon because he planned a very detailed strategy: after successfully implementing several projects, they would issue shares on the stock market to make big money, as he used to do at his previous company. But the real estate market has been frozen for almost two years, making all the plans of Van still only on paper. Not investing in real estate investments, Mr. Dong, director of a business in the field of export- import and services, is also trying to find ways to survive. As a senior expert in import and export, more than 20 years ago Dong traveled across Eastern Europe to purchase batches of trucks to import into Vietnam. After leaving his state-owned company, Dong immediately opened a joint-stock commercial services and import-export company. His company makes everything from airline tickets, car import, tourism to labor export. A few years ago, when the import of cars was thriving, each month he imported 10 - 20 expensive cars from available Japan and the Middle East. That day, he rented the whole floor of a central building which was the most expensive in Hanoi to base his headquarters. The director always looked fresh, in chic clothes and sleek hair, drove a Lexus car like a diplomat. Yet, earlier this year, after several times of narrowing his office, Dong he finally had to move his office to 10km far from the center. Not long ago, seeing Dong, he said he had just gone abroad to find a contract. "In the hard times, the director must go to seek contracts alone. I’ve fired some employees." It is said that he sold his Lexus and borrowed a lot of money from his friends and banks. Production and business are in difficulty while businesses had to bear high interest rates for a long time. As a result, tens of thousands of companies have been dissolved. At a garment company, which previously exported products to Europe and employed a few hundreds of workers, there was only the director and a gate guard. Talking about business, the director said he had to suspend workers because the firm did not have customers. Bosses go to jail because of debts There are businessmen who became offenders of fraud. The case of Mr. Pham Van Thu, chairman and CEO of Thai Son Company in Hai Phong is an example. In early August, the police arrested Thu for "fraud and appropriating property" related to bank loans. His son - Pham Hai Thanh, former CEO of Thai Son, Duong Hoang Son, former Director of Thanh Son Steel Company were also prosecuted for the same crimes. Getting rich from dismantling old ships, Thu formed Thai Son Co. in 1995, trading in capital goods, mechanical products, electrical appliances, steel, waste, water and land vehicles. In early 2000, thanks to the “fever” for steel, Thuy became a "giant" in the port city of Haiphong. However, in 2010, when the old ship dismantling industry, the steel industry and the ship building industry began showing signs of going down, factories and their equipment which were built and purchased by short-term loans became a burden for Thu. To maintain these plants, especially shipyards and steel factories, Thu joined Pham Hai Thanh and Duong Hoang Son borrowed banking loans to import iron and steel, then occupied the capital in order to take money to maintain the operation of their plants and to cover short-term debts. The amount of short-term loans and commercial loans reached more than VND1 trillion ($50 million). By August 2011, 13 banks ranked Thai Son Ltd. and its subsidiaries in the form of "bad debt" and stopped lending them. However, during the debt recovery process, banks discovered that they were cheated because most of the credit agreements Thai Son Company and its subsidiaries were based on virtual assets. Even with the same assets, Thu mortgaged at several banks. So until Thu and his son were arrested, they withdrew over VND1 trillion from banks. Compiled by Tran Cham