DIC Corp (DIG) was fined nearly half a billion VND
The State Securities Commission (SSC) has just issued a decision to sanction administrative violations in the field of securities and the securities market against the Construction Development Investment Joint Stock Corporation - DIC Corp (DIG).
In particular, DIC Corp was fined VND 85 million for not disclosing information on the Board of Directors' resolution dated January 14, 2022 regarding the change in the plan to use capital raised from the private share offering.
In addition, DIG was also fined an additional VND 175 million for failing to report changes in the plan to use capital raised from the 2021 private share offering stated in the Board of Directors' resolution dated January 14, 2022.
DIC Corp (DIG) was fined half a billion VND for changing the purpose of using mobilized capital without notifying as prescribed (Photo TL)
DIG was also fined VND 150 million for disclosing false information about the Capital Use Progress Report in the Board of Directors' resolutions dated October 13, 2022, April 14, 2023 and October 10, 2023.
In these reports, DIG stated that the purpose of using capital according to the issuance plan is to invest in the Vung Tau New Urban Area project, Ward 12, Ba Ria - Vung Tau province", "The purpose of disbursement is to pay for project investment preparation costs and site clearance compensation.
However, in the Capital Use Progress Report dated April 20, 2022 and the Capital Use Progress Report dated October 13, 2022, DIG used capital for two purposes: investing in the Vung Tau New Urban Area project, and paying the remaining amount to Tan Long Investment and Development JSC.
Finally, DIG was fined an additional VND60 million for failing to disclose a report on the use of capital raised from the 2021 private share offering to implement the project, which was audited by an approved auditing organization, at the 2022 Annual General Meeting of Shareholders. It did not explain in detail the use of capital raised from the 2021 private share offering to implement the project in the audited financial statements for 2021. DIG's total fine was VND470 million.
DIC Corp issues additional 2,100 billion VND in bonds
Recently, DIC Corp has approved a plan to issue up to VND 2,100 billion in private bonds in 2023. These are non-convertible bonds, without warrants and guaranteed by a credit institution's payment guarantee. The expected issuance period is from the fourth quarter of 2023 to the end of 2024.
According to DIC Corp, the purpose of the issuance is to supplement capital to implement 3 major projects including: Long Tan Urban Tourism Area project; A5 Apartment project in Chi Linh Central Area, Vung Tau City; Cap Saint Jacques Complex project.
DIC Corp's outstanding bond balance has long been a topic of interest to investors. In early 2022, DIC Corp recorded a huge total bond balance of VND 3,387.2 billion. After fluctuations in the corporate bond market, DIC Corp bought back bonds, reducing the outstanding bond balance at the end of the third quarter of 2023 to only VND 889 billion.
If this issuance plan is successfully implemented, DIC Corp's outstanding bonds will once again continue to increase by thousands of billions of VND.
After 9 months, only 10% of the year's target has been completed.
DIC Corp's bond issuance took place in the context of the company's business activities continuously recording a decline. Revenue in the third quarter of 2023 most recently reached VND 235.2 billion, down about 44.5% over the same period. The company recorded a gross profit of VND 66.9 billion, down 41% over the same period. The corresponding gross profit margin remained at 28.4%.
Financial revenue reached VND10.8 billion, down 27.6%. At the same time, financial expenses also decreased by two-thirds, down to VND11.6 billion. Sales expenses and business management expenses both decreased, accounting for about VND46.6 billion.
After deducting all expenses, DIC Corp's after-tax profit was VND12.1 billion, an improvement over the same period last year. However, it should be noted that the company escaped losses partly thanks to a sharp cut in payable expenses. Business activities are still being affected by the market downturn as revenue has dropped sharply compared to the same period last year.
DIC Corp's accumulated revenue in the first 9 months of the year reached VND593.7 billion, down 60.9% compared to the previous year. Profit after tax recorded VND97.7 billion, down 31% compared to the same period. Compared to the business target set at the beginning of the year, DIC Corp has only completed 10% of the annual profit plan.
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