Former Chairman Nguyen Khanh Hung sold 7.89% of capital at LDG Investment within 3 years

Before the period of instability in senior leadership, in the 3 years from 2021-2023, the former Chairman of the Board of Directors of LDG Investment Joint Stock Company (code LDG - HoSE floor) continuously sold and reduced ownership.

In the 2023 Management Report, LDG Investment Company said that in 2023, Mr. Nguyen Khanh Hung reduced his ownership from 7.23% to 3.92% of charter capital and is no longer a major shareholder of the Company; and Mr. Nguyen Minh Khang, Vice Chairman of the Board of Directors, divested all 387,875 LDG shares, equivalent to 0.15% of charter capital and officially owns no shares.

Thus, after 2023, LDG Investment Company will no longer have any major shareholders owning more than 5% of the Company's charter capital.

Previously, in 2021, Mr. Nguyen Khanh Hung reduced his ownership from 11.81% to 11.29% of charter capital; and in 2022, Mr. Nguyen Khanh Hung continued to reduce his ownership from 11.29% to 7.23% of charter capital.

Mr. Nguyen Khanh Hung, former Chairman of the Board of Directors of LDG Investment JSC. (Source: LDG)

According to the investigation, previously, on November 29, 2023, the Investigation Police Agency of Dong Nai Provincial Police issued a Decision to prosecute the accused, an Arrest Warrant to temporarily detain Nguyen Khanh Hung, born in 1978, Chairman of the Board of Directors, legal representative of LDG Investment Joint Stock Company for the "Crime of deceiving customers" related to the Tan Thinh Residential Area project invested by LDG Investment Company.

After that, LDG Investment Joint Stock Company approved the dismissal of Mr. Nguyen Khanh Hung from the position of Chairman of the Board of Directors and legal representative, and elected Mr. Ngo Van Minh, who is currently holding the position of Acting General Director, to hold the position of Chairman of the Board of Directors from December 19, 2023.

In addition, LDG Investment Company also approved the election of Mr. Tran Cong Luan, currently holding the position of Deputy General Director, to the position of General Director of the Company from December 19, 2023, replacing Mr. Ngo Van Minh, currently holding the position of Acting General Director.

Thus, before being arrested, within 3 years, Mr. Nguyen Khanh Hung sold 7.89% of charter capital at LDG Investment Company.

Operating below cost in Q4 and full year 2023

In terms of business activities, in the fourth quarter of 2023, LDG Investment Company recorded sales revenue lower than revenue deductions, so net revenue recorded a negative VND 36.99 billion compared to the same period, positive VND 46.82 billion, a decrease of VND 83.81 billion and profit after tax continued to lose VND 165.08 billion compared to the same period, a loss of VND 4.06 billion, an increase of VND 161.02 billion.

During the period, with revenue lower than deductions, LDG Investment Company operated below cost price, resulting in a negative gross profit of VND 92.66 billion compared to the same period of positive VND 10.22 billion, a decrease of VND 102.88 billion. In addition, during the period, financial revenue decreased by nearly 100%, from VND 91.22 billion to only VND 0.03 billion; financial expenses decreased by 29%, equivalent to a decrease of VND 14.61 billion, to VND 35.82 billion; sales and business management expenses decreased by 19.5%, equivalent to a decrease of VND 6.54 billion, to VND 26.93 billion, and other activities fluctuated insignificantly.

Thus, in the fourth quarter, although LDG Investment Company reduced financial, sales and business management costs, it still recorded a loss of VND 165.08 billion, mainly due to business below cost price and lack of financial revenue.

LDG Investment Company explained that financial revenue decreased due to no longer recording compared to the same period of 24.7 billion VND of late payment interest; no longer recording compared to the same period of 66.5 billion VND of interest from liquidation of other long-term investments.

Accumulated in 2023, LDG Investment Company recorded revenue of VND 36.51 billion, down 81.1% over the same period and after-tax profit recorded a loss of VND 374.4 billion compared to the same period with a profit of VND 4.2 billion, a decrease of VND 378.65 billion.

It is known that in 2023, LDG Investment Company plans to do business with revenue of VND 1,448 billion, an increase of 424.1% over the same period and expected after-tax profit of VND 3.9 billion, a decrease of 2.7% over the same period last year.

Thus, with a record loss in 2023, LDG Investment Company is far from its plan to make a profit in fiscal year 2023.

According to research, LDG Investment Company has been listed on HoSE since 2015. According to SSI Securities data, from 2015 to now, LDG Investment Company has never recorded a loss of up to VND 374.4 billion like in 2023, the year with the lowest profit was 2022 with a profit value of VND 4.24 billion.

Negative cash flow for 5 consecutive years with only 3.6 billion VND in cash left

In addition, in terms of cash flow, in addition to the loss-making business, in 2023, LDG Investment Company's main business cash flow continued to be negative by VND 100.7 billion compared to the same period of negative VND 35.9 billion. In addition, investment cash flow was negative VND 1.3 billion and financial cash flow was positive VND 102.5 billion, mainly increasing debt to offset the deficit in business cash flow.

According to SSI Securities data, LDG Investment Company has experienced 4 consecutive years of negative cash flow. In 2019, it recorded a negative VND 1,769.56 billion; in 2020, it recorded a negative VND 96.5 billion; in 2021, it recorded a negative VND 956.35 billion; and in 2022, it recorded a negative VND 35.94 billion.

As of December 31, 2023, LDG Investment Company's total assets decreased by 5.7% compared to the beginning of the year, equivalent to a decrease of VND 445.6 billion, to VND 7,415.2 billion. Of which, the main assets were short-term receivables recorded at VND 3,878.6 billion, accounting for 52.3% of total assets; inventories recorded at VND 1,242.8 billion, accounting for 16.8% of total assets; long-term receivables recorded at VND 1,168.7 billion, accounting for 15.8% of total assets and other items.

In addition, in terms of capital, at the end of 2023, the total short-term and long-term debt of LDG Investment Company increased by 8.9% compared to the beginning of the year, equivalent to an increase of VND 109.2 billion, up to VND 1,331.9 billion and equal to 46.5% of equity (at the beginning of the year, the total debt was recorded at VND 1,222.7 billion and equal to 37.7% of equity).

In fact, despite owning an asset size of up to 7,415.2 billion VND, at the end of 2023, LDG Investment Company only owned 3.6 billion VND in cash but the total debt to pay interest was up to 1,331.9 billion VND.

Source