No Part 1.1 1.2 1.3 Part 2.1 2.1.1 2.1.2 2.1.3 2.1.4 2.2 2.3 2.4 Part 3.1 3.2 3.3 3.3.1 3.3.2 Part 4.1 4.2 4.3 4.4 Part APENDIX Introduction Intrduction about VINASHIN An overview of the economic group Vinashin The process of formation Development Financial analysis group VINASHIN Index Flexible index Ratio of curent payment Ratio of quick payment Ratio of cash payment Indicators of asset management Leverage ratio Profitable ratio The failure of VINASHIN in financial management enterprise Overview of incident The result of incident The cause of the incident Objective reasons Subjective reasons Experimental lessons about management taken out from default VINASHIN Lessons about decentralization The lesson of the investment capital management - to avoid scattered investment, loss of control The lesson of the inspection and supervision of the approriate authorities The lesson of management capacity Conclusion References INTRODUCTION Pages 4 6 7 7 10 11 11 12 13 13 14 18 18 18 19 19 20 21 Vietnam economy is on the rise, import- export demand is growing, especially when Vietnam's integration with the economy and become the 150th member of the International Trade Organization WTO Although shipping market at home and and abroad have certain difficulties currently, huge opportunities for growth is also latent Vinashin Group was founded with a vision is the leading shipbuilding industry in Vietnam Prime Minister Nguyen Tan Dung said on date that Vinashin converted in group model "Vinashin must be the core of the shipbuilding industry in Vietnam." While Mr Pham Thanh Binh, Chairman of Vinashin at that time said proudly: " a new red dot: Vietnam has made one’s appearance on the map of shipbuilding industries world Being expected and invested a lot and , Vinashin has achieved initial success, Vinashin brands is recognized on the international field , highly qualified labor, modern competence, shipbuilding industry ‘s material facilities has been perfected gradually these great achievements expected to contribute significantly for purpose developing sea- economic of Vietnam in an attempt to expoilt every condition advantages of a country having much of sea and island However, in the years 2008-2010, along with the plunge of the world economy in general, the shipbuilding industry in particular, the vessel Vinashin also revealed its serious weaknesses, especially in the work of corporate governance Up to June 2010, total assets of Vinashin was about 104,000 billion but total debt is 86 000 billion, chatered capital is not only low but also utilized therefore the accounts payable / equity ratio was nearly 11 times , fell into financial imbalance seriously, was prone to be brought to ruin,manufacturing was brought to a standstill, , workers changed jobs, nearly 17,000 people gave up their job, nearly 5,000 people lost their jobs Thus,why did Vinashin - from a powerful economic groups fall into a debt crisis? Vinashin is likely to be recovered to avoid shipbuilding industry of Vietnam starting again from the beginning,isn’t it? During the course of Corporate Finance with guidance with all his heart of teacher Dang Ngoc Dai, group has grasped lessons about financial management needing be taken out after bankruptcy of Vinashin to complete essay of the group However, time and knowledge is still restricted hence group wish nothing better than getting the contribution of the teacher and classmates IeMBA D01 to complete the essay fully PART 1: INTRODUCTION ABOUT VINASHIN GROUP 1.1 An overview of the economic group Vinashin: Vinashin abbreviated Business VINASHIN Group is an economic group specializing in ship operation under public ownership Group was established on 05.15.2006 on the basis of organization and rearrangement of the Corporation of Vietnam Shipbuilding Industry Before restructuring was accomplished, the Group operates following model the parent company – subsidiary company Includes parent company is Vietnam Shipbuilding Industrial Group, 24 subsidiaries, associated companies and 10 joint- venture company 1.2 Process of formation: - The predecessor of the group is 91 Corporation established in January 31, based on Decision No 69/TTg January 31st, 1996 of the Prime Minister about the establishment of the Vietnam Shipbuilding Industry Corporation - On May 15, 2006, the Prime Minister signed Decision No 103/2006/QD-TTg on approving the pilot scheme to form an multiple ownership economic group, in which Public ownership domitate , on the basis of arrangement and organization the Vietnam Shipbuilding Industry Company - On May 15, 2006, the Prime Minister also signed Decision No 104/2006/QD-TTg about the establishment of the parent company - Vietnam Shipbuilding Industry Group Accỏding to this decision, the parent company - Vietnam Shipbuilding Industry Corporation was established basing on reorganizing management, operating agencies an units member entering in the accounts of Vietnam Shipping Industry Company seafood This event marked the official birth of Vinashin 1.3 Development: When Vinashin was a newly formed organization,it was known as "steel punch" of the economy Vinashin is expected to be the core, the leading enterprise to develop Vietnam shipbuilding industries still at a start and underdeveloped at that time, as well as serving for the purpose expanding the Marine Economic, to meet the needs of national defense and security of Vietnam And indeed, since its inception in 1996 until being converted into model of economic group, Vinashin reached many important achievements: - First step,significant technical and material facility of the shipbuilding industry was formed synchronously with 28 shipyards operating with an advanced level of technology, quality of ship products recognized all over the world , having brand name and reputation in the shipbuilding industry in the world - 70,000 employees, in which 12,500 people have universitarian and above universitarian academic standard , more than 55,000 technical worker with fair qualifications, more than 5,000 people attain internationall certified.Technology was designed , initially ,the technical design for 58,000 tons, 115,000 tons ships were made Supporting industries branches were built, advanced a step in the localization rate of building and repairing ships - The annual average growth rate in 1996-2007 period reached 35% -40% / year, was profitable, net sales in 2008 reached 29,000 billion Until the end of 2009,Vinashin had contributed 3,300 billion into the state budget equity had just over 100 billion and only can buid 1000-3000 tons the ship, until now, equity has increased to 8,000 billion, the worth assets is 104,000 billio; can build 53,000 tons cargo, 105,000 tons tankers , ship loading to 6900 cars, oil floating storage - Until March 2009, already had many orders and preliminary shipbuilding contract agreement worth about $ 12 billion 279 ships worth over $ 1.8 billion were completed and transferred,including: 59 vessels with tonnage 6.500-15.000 tons;9 vessels with tonnage 22.500-34.000 tons; ships with tonnage 53.000 tons; container ships, a vessel can load 4900 cars, floating warehouses containing 150,000 tons of oil and many other ships Among the ships, 155 vessels valued at over $ 1.1 billion had been exported to foreign shipowners; 124 vessels worth $ 700 million had been sold to domestic owners In addition, completing a variety of other aquatic facilities to meet diverse needs of the economy and national defence and security - Ocean liner fleet with total load 700 thousand tons was formed from self-building and purchasing of foreign countries.It contributed to increase the marine transportation capacity of the country - Large plates, 150 ton derrick, 450 ton crane, 2,000 tons hydraulic press were manufactured successfully;……… that five years ago must be imported 100% PART 2: FINANCIAL ANALYSIS OF VINASHIN GROUP 2.1 Index 2.1.1 Flexible Index The index is used to measure the ability to convert liquid assets into cash the and short-term debt solvency of investment and Petroleum Transportation shares company- Vinashin Liquid assets Ratio of current payment= Short-term debt Unit: million Quota Cash and cash equivalents Các khoản đầu tư tài ngắn hạn short-term receivables Inventory Other short-term assets Liquid assets Accounts payable Short-term liabilities Ratio of current payment Ratio of quick payment Ratio of cash payment 2010 44.070.135.245 1.099.583.421.54 2.172.390.809.29 158.385.295.172 3.474.429.661.25 6.907.419.920.78 4.218.843.034.01 0,823550351 0,308624626 0,010446024 2009 5.453.573.892 1.429.198.028.894 647.890.059.581 25.370.443.990 2.107.912.106.357 5.683.458.544.923 2.387.876.671.739 0,882755852 0,611431094 0,002283859 2.1.2 Ratio of current payment : - 2009 shows a short-term debt was only secured by 0.88 dong working assets, in 2010, a short-term debt was only secured by 0.82 dong working assets - Ratio of current payment of in period 2009 - 2010 decreases 0.0 59% This ratio decreased slightly due to increased short-term debt rate - This ratio shows lower solvency and also was a sign that companies use short-term debt too much and warned about the financial difficulties 2.1.3 Ratio of quick payment : Shows the solvency of a company The ratio of payment VINASHIN the company in period 2009 - 2010 decreased 0.30% Quick Ratios of VINASHIN in 2010 was 0.61, indicating that the VINASHIN has 61% liquid assets for every debt due to date Quick ratio 0.61 billion, said that if the company's inventory is stagnant, not worth the company will fall into financial difficulty called the "inability to pay." That the inventory of 2010 increased times compared to 2009 shows the VINASHIN will get financial difficulties in the future if they not remedial measures 2.1.4 The ratio of cash payments: Payment ability of company is quick, period 2009 - 2010 increased times 2.2 Indicators of asset management: This ratio is used to measure the business activities of the company To improve the ratio of activities, we must know the property not used o not generate income, as a result, companies need to know how to use them effectively or remove them The ratio of activity may be called the efficient ratio, or ratio of rotation Active ratio is expressed through the criteria: Net Revenue Turnover of accounts receivable = Receivables Net income Inventory turnover = Inventory Net income Rotation of fixed asset = Fixed asset Net Income Rotation of total asset = Total asset Quota short-term Year 2010 1.099.583.421.543 Compare 2009 1.429.198.028.894 -329.614.607.351 receivables long-term receivables - - Fixed assets 3.398.343.709.334 3.693.818.828.108 -295.475.118.774 Total assets 6.917.335.636.819 5.825.413.550.112 1.091.922.086.707 Net sales 15.828.000.000 710.811.215.666 -694.938.215.666 Inventory 2.172.390.809.291 647.890.059.581 1.524.500.749.710 0.014 0.49 -0.48 0.007 1.097 -1.089 0.004 0.192 -0.187 0.002 0.122 -0.119 Number of accounts receivable turnover(times) Number of inventory turnover (times) Efficiency of using fixed assets Efficiency of using total assets The number of receivables turnover: From 2009 to 2010, the number of receivables turnover was reduced from 0.49 down to 0.014 times The reason was that the company's net sales in 2010 decreased compared to 2009 was 694 938 215 666 VND, and the short-term accounts receivable of the company also fell compared to 2009 was 329,614,607,351 VND Examining short-term receivables: Quota Short-term receivables Receivables from customers Prepayments to suppliers Internal receivables Receivable under the contract schedule The other receivables Provision for short-term bad 2010 1.099.583.421.54 112.572.000 622.992.404.387 1.515.666.631 480.860.861.787 -5.898.083.262 2009 1.429.198.028.89 112.822.200.894 716.299.632.698 32.853.273.972 567.222.921.330 Compare -329.614.607.351 -112.709.628.894 -93.307.228.311 -32.853.273.972 1.515.666.631 -86.362.059.543 -5.898.083.262 The amount receivable in 2010 decreased compared to 2009 was 112 709 628 894 so that it can be concluded that company could not sell more goods than in 2009 On prepaid custo mers, in 2010 decreased 93,307,228,311 compared with 2009 It can be said that companies worked more inefficiently than in 2009 In terms of other receivables, in 2010 also decreased 86.362.059.543.compared with 2009 By considering the short-term receivables separately, we can see that companies make business fall down Therefore, if companies not have good debt- recovery regime, will lead to slow recovery of capital, capital of the company is nonmarketable and the customer appropriate capital It will cause difficulties in the payment of company On the number of inventory turnover ,in 2010 reduced compared to 2009 (from 1097timess in 2009, down 0.007 times in 2010) Reduced number of inventory turnover proved that quality of product of enterprises is lower and lower so that the quantity of sold goods is less, stagnant goods bring about a reserve account for inventory.It makie the company difficult in revolving capital to expand production 2.3 Leverage ratio: Financial leverage ratio assess thelevel which a corporate sponsor for its business operations by borrowed capitalt For companies, financial leverage ratio will help financial managers select the most reasonable capital structure for the company.Through leverage ratio ,investors see the financial risks of company to decide investment decisions Leverage ratio is expressed through the criteria: Total debt Ratio debt/asset = Total asset Quota Total debt Total assets Ratio debt/asset 2010 6.907.419.920.784 6.917.335.636.819 0.99 2009 Compare 5.683.458.544.923 1.223.961.375.861 5.825.413.550.112 1.091.922.086.707 0.97 0.02 Ratio debt/asset This ratio in 2010 increased 0.02% compared to 2009 This shows the percentage of assets financed with loans of the company has increased 2.4 The index "Profitability": This ratio measure the income of the company with other factors making a profit as net sales, total assets and equity This ratio is shown on the criteria: Net Income Rate of Interest (TLL) = Sales of goods Income before taxes and interest of loan The ratio of property income (TNTS) = Total asset Net income Rate of profit on total assets(ROA) = Total asset Net Income Rate of profit on equity (ROE) = Equity Quota Goods sale Incomes before taxes Net revenue Equity Total assets TLL TNTS ROA ROE 2010 15.828.000.000 -171.113.797.796 -170.661.045.049 9.915.716.035 6.917.335.636.819 -10,78222423 -0,024736952 -0,0246715 -17,21116704 2009 710.811.215.666 6.010.902.023 6.010.902.023 141.955.025.189 5.825.413.550.112 0,008456397 0,001031841 0,001031841 0,042343707 Compare -694.983.215.666 -177.124.699.819 -176.671.947.072 -132.039.309.154 1.091.922.086.707 -10,79068062 -0,025768793 -0,025703341 -17,25351075 Comments: - Vinashin used too much short-term debt - Too much inventory - Indicators TNTS, ROA, ROE in 2010 were negative, the group lost PART 3: THE FAILURE OF VINASHIN IN FINANCIAL MANAGEMENT ENTERPRISE 3.1 overview of incident: Besides the great achievements that Vinashin has achieved, the group has also infected many mistakes, that peak was the bankruptcy of Vinashin in 2010 The case not only caused damage to private corporations but also harmed the economy directly In 2008, the global financial crisis makes the world economic decline, a number of financial institutions, large economic group in the world with hundred years of operation collapsed,; our economy was affected sharply, export market was narrowed, manufacturing is sluggish, economic growth slowed and; Vinashin was affected significantly, especially on markets and capital Banks tightened lending, investment projects being implemented could not complete to enter in manufacturing due to lack of capital Many shipbuilding contracts signed could not continue to get loans to finish on schedule Ocean trafic industry was brought to a standstill, the master canceled the contract and the shipbuilding agrement worth more than billion USD In 2010 ,the shipbuilding contracts were likely to be canceled coming up to 700 million USD On the other hand, the forecast is still inadequate, the project invests too much, spread, beyond the capacity to balance finance Some projects are not really necessary, so many projects have only been allocated 50% of the total capital Charter capital is limited, its own capital in projects is very low, some projects are invested by 100% loans Therefore, most projects are in-progress, as the industrial parks clearance projects of, export shipbuilding projects, these projects haven’t been enter to utilize but still paying interest Investment in fleet development including the purchase of too old foreign ships, in- efficient operations Develop business apidly, making capital contribution outside the main business sector is so huge, loanning and guaranteeing for lending associated companies, many units work inefficiently, not pay their debts and are uncontrolled The inefficient use of capital has caused serious financial consequences for Vinashin Group 10 To resolve the difficulties mentioned, Vinashin had to borrow new debt to pay old debt, long-term debt to pay short-term due to date, even use working capital to invest In 2009,as a result, Vinashin lost By June 2010, total assets of Vinashin was about 104,000 billion, but total debt is 86.000 billion (in which there were two major debt is $ 750 million foreign debt guaranteed by the Government and $ 600 million that Vinashin borrowed foreign by itself In Vietnam, Vinashin borrowed from 10 banks in that State-owned commercial bank is main.low charterd capital was spreaded therefore ratio accounts payable/ equity was nearly 11 times, felt into hard financial imbalance, the risk of bankruptcy, stagnated production, workers change djobs, nearly 17,000 people gave up job, nearly 5,000 people lost their job Getting many difficulties and suffer many mistakes mentioned , however, the Group has not reported the financial situation of enterprises honestly., For example,lossing 1.6000 billion in 2009 but reported that having 750 billion interst Along with that is the finding of violation with criminal signs, but not be handled and stopped in time, typically the "Over 11 times of inspection, the audit found violations as widespread investment spread over many areas not related to corporate functions, inefficient, heavy losses; financial situation faces with bankruptcy, sluggish production, the complicated internal situation "has made consequences more serious 3.2 The result of the incident: - Causing loss of more than billion USD venture belong to state - Affect the workforce of corporations, nearly 17,000 workers give up , nearly 5,000 people lost their jobs 11 - Reducing prestige on borrowing on interest of Vietnam enterprises on international markets, Vietnam is downgraded national credit trusting due to Vinashin - Delaying the development of Vietnam marine economy because Vinashin has accounted for almost the entire market share providing technical equipment for this sector for a long time - The debts of Vinashin create cost burden for monetary policy and fiscal policy, thereby creating a line resulting influencing many businesses both within and outside the National Business 3.3 The cause of the incident: 3.3.1 Objective reasons: - The world economic crisis 2008-2009 make the world economy decline sharply, the economy of our country are greatly influence Dosmestic and foreign economic Corporations are stormy, go bankrupt and need hands of the Government to revive Economic crisis has made the financial situation of Vinashin serious, especially on markets and capital The loans due to date repeated without solvency - Banks tightened lending, investment projects being implemented could not complete to enter in manufacturing due to lack of capital Many shipbuilding contracts signed could not continue to get loans to finish on schedule Ocean trafic industry was brought to a standstill, the master canceled the contract and the shipbuilding agrement worth more than billion USD In 2010 ,the shipbuilding contracts were likely to be canceled coming up to 700 million USD Shipbuilding market and shipping on worldwide felt dramatically From 1999 to 2007, the world shipbuilding industry thrived with a total tonnage of new bulidingship by 51% of total load of the total active flotilla in the world In 2008, the marine transport business was brought to standstill, the world shipbuilding industry felt into regression The total value of new buildingship contracts decreased 38% compared to 2007.Athought the price of buiding new ship halved ,, shipbuilding market came to standstill, orders plummeted (container ships decreases 57% , large bulk carriers decreased 66%), many other ships (natural gas and chemicals transporting) reduced 12 80%,some kind of vessels had few newbuilding contracts Some shipping companies must cancel the signed contract Many of the world shipbuilding firms faced with bankruptcy and forced to reduce workforce, narrow investment and production Business activities of the Vinashin Group is building, repairing ship and ocean shipping that was used to have extensive international economic integration depended heavily on world markets.Therefore, in that context, development, production, business, financial condition of Vinashin was affected very badly 3.3.2 Subjective reasons:  Due to protection First of all is the responsibility of the Government and the Ministry of Transport the governing body of Vinashin State Audit had inspection plan in 2008 but was delayed until 2009 and then 2010 However, this plan continues to be "delayed" due to not being approved Although Vinashin appear signs of crime , it is still covered up The next reason is pointed out that "the State management and implementation of ownershi rights of the government with corporations in general and Vinashin in particular is still inadequate, embarrassed Ministry of Transport has not promptly detected weaknesses in the operation  Because of scattered investment , lack of science: Vinashin had abused position to invest widely,lead to running uncontrollability Starting from shipbuilding, Vinashin should focus on developing their career before expanding to other areas However, Vinashin has invested to encroach on some sectors ‘s 13 territory such as steel, finance, real estate, electricity Weak leadership capacity and the investment not only spreading but also out of control is one of the cause plunging Vinashin ship The inefficient use of capital, the forecast is still inadequate, therefore, the planning of business and investment plans is not accurate The project invest too much, spreads , some project invested by 100% loans, some projects haven’t been entered to use but must pay interest Some typical projects Vinashin showed very poor ability of the management board of directors of this corporation: - The Vinashin Oceangoing transportation Company (VNSlines) (subsidiary of Vinashin) invested over $ 200 million (approximately 3136 billion) to buy the vessel 22 to 26 years old among ships of the this company Virtually,all of current ships does not run at all due to damageability, due to be arrested in domestic and foreign ports (due to lack of money to pay for services or mean technical equipment) - Building LASH vessel to transport barges: On 22/07/2005, VNS has signed a credit contract with the Haiphong Development Assistance Fund about 309.896 billion loan to deploy plan building H165 ship, assigned a job to Nam Trieu Shipbuilding Company (NASICO) ; and hired Vietnam Registry Department to supervise, issue dregistration certificate for ship NASICO promised to hand over the vessel in August,2007 but officially handed over to VNS on 2/10/2008 The total cost of building new ships H165 Lash (was named Lash Gianh River) was about 400 billion - Investment in purchasing stock of Vietnam Insurance Corporation ( Bao Viet)with a value of 1467 billion; buy 20.4 million shares accounting for 3.56% of capital with price 70 thousand VND, then the Government asked State Investment and capital business Corporation to buy back with initial price, although market value at that time was only 40 thousand VND 14 - Buy Lotus ship from Italy on 15.10.2007 cost ( 60 million Euro apprõimately1,300 billion), running north-south route, now it stops running because each trip losses of 1.5 billion VND Lotus ship had been in holes at the bottom in the exploytation time in Italy, brought back to repaire Now,it is located in the waters of the Cam Ranh shipbuilding industrial company Although that ship has not run, the engine must be ignited and ship must be guarded Annual interest payments is nearly 80 billion - Cai Lan Diesel power plant: buy old equipment toassemble and allow the contractor to be careless in work even Cai Lan Diesel power plant has only active generator that is generator and generator with 75% capacity , the other four generator are broken After two years of operation (from 4-2007 to 10-2009) Cai Lan plant lost more than 62 billion, total debt not afforddable to pay came up to 27.58 million dollars and 107.5 billion  Because of tort oF leadership in management process The systematic error due to weak, bureaucratic, authoritarian leadership of leader of the corporation Typically, Mr Pham Thanh Binh gathered in his hands absolute power : Secretary of Party Committee, Chairman of the Board, CEO The hard failure of Vinashin is due to centralized regime, because of bureaucratic, autocratic, immaturity management of the leader of the group 15 The organization lacks of scientific leading to heavy ,overlaped organizational structure leads to, there is few close link between departments and subsidiaries - The division of work is illogical, typically, Finance and Accounting Department of Vinashin did not monitor the mobilization of capital from abroad directly, but business department assumed instead When funding was supplemented ,the business department allocated to the subsidiares, borrowing but not push paying debt, the rate of progress is sluggish Finance and Accounting Committee tasked by not grasp the information should not debt - Relationship between subsidiaries is too loose The companies not combined in assiting manufacturing There is phenomenon in Vinashin :some branches have orders to bulding ship and in contrast,some branches have too many orders that rate of progess is not in time, some branches not only have large square but also buy too much materials and equipment leading to redudance such as Nam Trieu, Pha Rung shipbuilding yard,some branches lack of materials and equipment to build ship such as Ha Long dockyard The examination is heedless and there is a lack of internal legal lobby leading to appearance of serious violations but no be adjusted 16 PART IV: EXPERIMENTAL LESSONS ABOUT FINANCIAL MANAGEMENT TAKEN OUT FROM DEFAULTS OF VINASHIN Over the causes leading to insolvency of Vinashin mentioned, we can see the mistakes in the administration in this group is the most important causes the management of Vinashin has acquired many serious mistakes obviously Looking back at the bitter failure ,we can take out useful lessons 4.1 Lessons about decentralization: Actual evidence show that the economic groups, corporations and heads of state corporations, the group is assigned too much power Once power is concentrated in the hands will lead to authoritarian, autocratic, uncontrollable investors Vinashin has invested heavily on super projects, purchased wasteful equipment Typically, purchaseing Lotus ships worth nearly 1,300 billion but unable to use This group not only invested in purchasing material facilities wastefully but also invested trillion in stocks, shares not belong to its strength It all stems from the will of the head group as they have a large concentration of power transferred from the owner in hand Therefore, powers need to be separated a reasonably to prevent autocracy and improve efficientmanagement, complete intended target Controlling the economic behavior of the Group but still create a self-control corridor for the Group is the lesson that should be answered by the governing body 4.2 Lessons about investment capital management - to avoid scattered investment, loss of control: If taking the reciprocal capital of investors to implement projects, Vinashin will certainly never have enough financial capacity to perform the super project Obviously, the equity of Vinashin (8000 billion) is just too small for the size and scope of investments which the Group has made To make the "dream" , Vinashin borrowed huge trade loans that is risk of potential, adventure Even must accept risk when doing 17 bussiness,but if engage in hazardous activities blindly like Vinashin is unacceptable and other groups must take out many experimental lessons According to data from the audit and from this group, from 2005 to before the economic crisis world in early 2008, the list of investment projects of Vinashin has reached the number 257, with total cost of more than 50,000 billion This amount of money is not small, but due to the spread, many of them are not granted sufficiently Until now, more than three-fourths of the project is still unfinished Major lesson taken out is the need of combatting and uncontrollable investment The spreadout investment not only reflected in the investment outside main bussiness but also in decisive bussiness 4.3 Lessons about the inspection and supervision of the approriate authorities: As the above analysis, if the management agency and supervisory office combine with each other skillfully,Vinashin ship will not fall in this situation If State Auditor and government Inspector have fit coordination mechanisms, or the Ministry of Transport does not just stop at the hearing false reports of this group Clearly, the management body has been passive and not kept pace with every step of this corporation Vinashin has invested in a super comfortable with many projects, including equity capital, both domestic loans and foreign debt While the management capacity of the agency's management and the group's leaders did not keep up the excessive expansion activities that caused serious of issues related to investment management, liabilities, current money It makes vinashin trains faster and faster go to the edge Despite what people said, they could not deny the fault of the ministries and agencies for the collapse of this group 4.4 Lessons about management capacity: With over 200 member businesses, hundreds of thousands of venture capital billion, spread over a wide area from North to South , The size of Vinashin is too large compared to management ability Naturally,overload status in management leads to 18 suffering losses Obviously, that “ ability and weakness and shortcoming management level; formulating and implementing production planning - business and investment plans is not only too fast but also not suitable with capital and management ability” play an important role in unsuccessfullness of Vinashin Thus, management standard must be enhanced when the size of enterprise is larger and larger, management standard must catch up with scale,simultanously,should streamline the organizational structure by means of restructuring to reduce the pressure for the management of the business Part V: CONCLUSION Vinashin going to the crisis, has both objective and subjective reasons, however, it is confirmed that subjective reasons stemming from mistakes in the work of management corporation,management capability as well as weak , inaccurate forecasts is main reasons directly causing the failure of Vinashin Vinashin fails, it causes extremely large loss, and follow the law of the market it deserves bankruptcy However, Vinashin is an important factor in the economic strategy of Vietnam marine economic, "If the Vinashin goes bankrupt ,will have to rebuild the shipbuilding industry in Vietnam Government policy restructuring Vinashin to make it become core of the Vietnam shipbuilding industry "although on controversy, solution to save Vinashin ship was launched Government policy restructuring Vinashin,in which converts the parent company - of Vietnam Shipbuilding Industry Group into models one member limited liability companies hold 100% charter capital by the State, besides , the Prime Minister's decision is dividing Vinashin into three parts, moving down the debt as well as projects to Vietnam Petroleum Group (Petrol Vietnam) and Vietnam Marines Corporation (Vinalines) The above solution had some results initially The project moved on Vietnam Petroleum Corporation has started again, more than 1,000 (of 6,000) worker quiting at Dung Quat shipyard returned to work, expected in October 2010 will launched the 104,000 tons tanker Many ships in the ocean fleet moved on Maritime Corporation Vietnam has become active again, Recently, the Group has sold four Vinashin ship building worth nearly $ 110 million (a 53 000 ton ship, a 56,000 tons ship, two 17,000 19 tons ) to the customer and transfered some investment projects outside the main sectors to recover capital; been focusing their efforts to complete the unfinished ship A "new Vinashin" is being triedto build " a new Vinashin focusing on key sectors, will have enoug abilities to overcome the current difficulties Roadmap for a new Vinashin is determined: Until 2012,deleting all losses, having interest in 2014 " A "new Vinashin" can appear soon in the future, but the lessons about management corporation from Vinashin in 2010 will be always everlasting Through this case, we can see the Administration problem is extremely urgent for any business, it is the decisive factor deciding the success or failure of your business To succeed, Administration must be always taken care of REFERENCES   Report of the Government Office for Vinashin http://chinhphu.vn  Vietnamese Wikipedia http://vi.wikipedia.org  Website of Vinashin http://vinashin.com.vn  And many other documents from the Internet 20 ...said on date that Vinashin converted in group model "Vinashin must be the core of the shipbuilding industry in Vietnam." While Mr Pham Thanh Binh, Chairman of Vinashin at that time said... complete the essay fully PART 1: INTRODUCTION ABOUT VINASHIN GROUP 1.1 An overview of the economic group Vinashin: Vinashin abbreviated Business VINASHIN Group is an economic group specializing... This event marked the official birth of Vinashin 1.3 Development: When Vinashin was a newly formed organization,it was known as "steel punch" of the economy Vinashin is expected to be the core,