Risk
is an inevitable factor in business operation activities, higher return is
always accompanied by higher risks. Coping and managing risk is an integral
part of any business if you want to make profit and
create value to shareholders. However, in fact, there are a lot of businesses
does not manage risk effectively
and furthermore not fully understand about the risks that they are facing.
Risk can
be defined broadly as any factors or events could drive business and production
activities of the enterprise below forecasted. Specifically, the measures that
are commonly used as capital risk, profit risk
or cash flow risk, depending on the emphasis that are accounting balance sheet
and statement of cash flows.
According
to the Vietnam Ministry of Industry and Trade, in recent times, there are many corporate scams between Vietnam and
foreign enterprises. In particular, the main behaviors are foreign companies
purchase/sell goods or provide services for partners in Vietnam and the Vietnam
partner fail to make payment.
Typically,
a director has scammed 3 billion VND of foreign companies and he was arrested.
Although his company does not have pepper but he still receives nearly 350,000
USD of the Egyptian company, then appropriated half. According to the
investigation, a few years ago, Vinamex Co., Ltd signed contract with a Libya
company in Egypt to sell 4 black pepper containers with price of 669,600 USD
even though the Vinamex Company do not have condition to implement the contract
and also do not have goods.
To
obtain the money of partners, the Director of Vinamex forging multinational
bills of lading, certificate of plant quarantine and then send to Lybia
Company. The Lybia Company then transfer to Vinamex a deposit amount of 348,300
USD. After that, Vinamex’s director withdraws all money to pay for his
company’s debt.
After
months have been urging, the Vinamex Company buy a container of black pepper
worth 174,150 USD and then send to Lybia Company. The remaining amount
equivalent to 3 billion VND was appropriated by the Vinamex’s director. The
Lybia Company has adopted Vietnam embassy in Egypt to submit the denunciation.
In
fact, many business leaders often put heavy emphasis on the business activity,
profit, and revenues instead of concentrating more on risk management.
Improving risk management process will create a tight and effective control of
the Board of Directors, on the other hand will help integrate the risk management
process into every daily decision-making process.
Businesses
do not improve the risk management process will be faced with a lot of
different types of risks: financial losses serious, adverse effects on cash
flows and the value of shares, as declining prestige with customers, employees
and investors.
Businesses
that do not improve the risk management process will have to
face with a lot of different types of risks: serious financial losses,
adversely affecting cash flows and the value of shares, decreasing prestige
with customers, employees and investors.
In
the period of global crisis had been predicted that almost bottomed out and
started to show signs of recovery, although the recovery process can occur with
different speed and characteristics depending on sector and location of the
business, the fully preparation of business in all aspects including process
and risk management strategy could
helps business not falling into the passive and also have more possibilities to
take advantage of growth opportunities after the recession.
ANT
Consulting is here to assist you from the outset; providing corporate
intelligence, risk advisory,
management consulting services that assist market entrance, and ensure
efficient business start-up operation.
We
strive to save your cost by guiding you towards economical solutions that
comply with local legislation and procedures. We support you through early
logistic solutions and carry you through as your business grows. We aim
to bridge the gap between international best practices and local cultures and
assist foreign companies and organizations entering Vietnam market to overcome
commercial and regulatory issues.
We could be reached at
email: ant@antconsult.vn or
tel: +848 3520 2779 . To learn more about us, please visit www.antconsult.vn
