With the ambition to become an international multi-industry corporation, with the plastics industry as its focus, the long-standing enterprise Rang Dong Plastic had an unfortunate slip.
From the leading plastic manufacturer...
Recently, Rang Dong Holding Joint Stock Company (Rang Dong Plastic; HoSE: RDP) has continuously received bad news, from being fined for violating information disclosure, a subsidiary requesting to open bankruptcy proceedings to all 5 members of the Board of Directors simultaneously resigning. RDP shares are currently suspended from trading.
Once aiming to become a multi-industry business group of international stature with the plastics industry as its core, but after 65 years of operation, the long-standing plastics company in the South is on the brink.
The predecessor of Rang Dong Plastic was the French Far East Rubber Enterprises Union, established in 1960. After changing its name to Ufiplastic, the company took the lead in importing advanced equipment from Japan and Taiwan (China) to produce new products in the plastic industry.
After 1975, the company changed its name to Rang Dong Plastic Factory and began to expand its factory network in Hanoi, Nghe An and Khanh Hoa. From 2005 to 2018 was the period of strongest development of Rang Dong Plastic, the company not only expanded its factory system but also established many more subsidiaries.
For the domestic plastic manufacturing industry, Rang Dong Plastic is a leading enterprise, especially in PVC thermoplastics and roofing sheets. At many times, products such as PVC thin films or roofing sheets of Rang Dong Plastic account for more than 50% of the domestic market share.
For the export market, Rang Dong Plastic has imitation leather products specializing in serving the yacht interior decoration industry. During the “profitable” period, the output of this product grew by an average of 20%/year.
Before 2023, Rang Dong Plastic's financial situation was quite good with an after-tax profit of tens of billions of VND each year. For example, in 2021, RDP had a net profit of 38 billion VND and in 2022, a profit of 13 billion VND.
The person who steered and contributed to Rang Dong Plastics' rise to the top of the plastics industry is Chairman of the Board of Directors Ho Duc Lam. Mr. Lam is known as the younger brother of former Deputy Minister of Industry and Trade Ho Thi Kim Thoa - who has been prosecuted and wanted since July 2020.
As of June 2024, Mr. Lam owned nearly 7.8 million RDP shares, accounting for 15.87%. Mr. Lam's son, Ho Duc Dung - who has just resigned as a member of the Board of Directors - holds 65,269 RDP shares, accounting for 0.13%.
...to 'slip', standing on the brink
Rang Dong Plastic's financial picture began to darken in 2023 when the company lost a lawsuit against Sojitz Pla-net Corporation (Japan), forcing it to pay back VND157 billion and related costs.
The incident took place in 2017, when Sojitz Pla-net signed a contract to buy 5 million shares at Rang Dong Long An Joint Stock Company owned by Rang Dong Plastic for VND174.4 billion.
After transferring shares, Rang Dong Plastic violated some obligations, so the Japanese partner wanted to terminate the contract, demanding a return of 90% of the contract value, equivalent to 157 billion VND. Because Rang Dong Plastic did not pay, the Japanese company filed a lawsuit.
The Singapore International Arbitration Center later ruled that Sojitz Pla-net won the case, requiring Rang Dong Plastic to return VND157 billion to its partner with an interest rate of 10% per year. In total, the plastic company must return VND174 billion.
The consequences of the lawsuit immediately affected Rang Dong Plastic's financial situation. The 2023 consolidated financial report showed that the company lost nearly VND147 billion. In addition, the company owes banks a total of VND1,331 billion.
Most recently, Rang Dong Plastics announced its financial situation for the first 6 months of 2024 with a loss of more than 64 billion VND. Accumulated loss up to June 2024 is 266 billion VND.
Earlier this year, the Ho Chi Minh City People's Court announced that it had accepted the petition to open bankruptcy proceedings against Rang Dong Plastics at the request of Rang Dong Films Joint Stock Company (Rang Dong Films). As of June 2024, Rang Dong Films is one of five subsidiaries of Rang Dong Plastics with a 97.7% ownership ratio.
The court requested Rang Dong Plastic to explain the reasons leading to its insolvency, declare its assets, bank account balance, list of creditors and organizations and individuals who owe the company.
Recently, explaining the delay in announcing the 2024 governance report and the 4th quarter 2024 financial report, a representative of Rang Dong Plastic said that from mid-2024 until now, the company has encountered many difficulties and has jumped into the bad debt group.
Currently, Rang Dong Plastic and its subsidiaries have stopped operating, most of the employees have quit their jobs, so they cannot provide data to synthesize and prepare financial reports on time.
Employees quit en masse, former Deputy Minister Kim Thoa's brother's company stops operating
Revealing the 'family group' of former Deputy Minister Kim Thoa at Rang Dong and Dien Quang plastics
The entire Board of Directors of Rang Dong Plastic resigned, including the younger brother and nephew of former Deputy Minister Ho Thi Kim Thoa.
Source: https://vietnamnet.vn/tu-giac-mo-da-nganh-den-cu-truot-chan-cua-nhua-rang-dong-2377378.html
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