A large Vietnamese garment company was fined because 'the father is the chairman, the son is the general director'

TNG Investment and Trading Joint Stock Company has appointed the company's general director, who has a family relationship with the business manager, as chairman of the board of directors.

Mr. Nguyen Van Thoi - Chairman of TNG - Photo: TNG

Specifically, the Chief Inspector of the Department of Planning and Investment of Thai Nguyen province has just issued a decision to impose administrative sanctions on TNG Investment and Trading Joint Stock Company (TNG).

The decision clearly stated that TNG Investment and Trading Joint Stock Company committed an administrative violation when appointing General Director Nguyen Duc Manh, who has a family relationship with the business manager, Chairman of the Board of Directors Nguyen Van Thoi.

The Inspector of the Department of Planning and Investment of Thai Nguyen province affirmed that this appointment did not meet the conditions prescribed in Point b, Clause 5, Article 162 of the Law on Enterprises.

For the above violations, TNG must pay a fine of 25 million VND and at the same time be forced to remove Mr. Nguyen Duc Manh from the position of general director of the company. The time limit for implementing remedial measures is 10 days from the date of receiving the decision.

Mr. Nguyen Duc Manh - General Director of TNG

This decision was assigned to Mr. Nguyen Van Thoi - Chairman of the Board of Directors of TNG Investment and Trading Joint Stock Company, representing the violating organization.

"If TNG fails to voluntarily comply within the deadline, it will be forced to comply according to regulations," said the Inspectorate of the Department of Planning and Investment. In addition, the inspectorate also said that TNG has the right to appeal or file an administrative lawsuit against this penalty decision.

According to TNG's management report, Mr. Nguyen Duc Manh is the biological son of Mr. Nguyen Van Thoi. Mr. Thoi also has another son, Nguyen Manh Linh, who is a member of TNG's board of directors.

According to research, point b, clause 5, article 162 of the Law on Enterprises stipulates: "For public companies, state-owned enterprises and subsidiaries of state-owned enterprises, the director or general director must meet the following standards and conditions: Must not be a family member of the enterprise manager, controller of the company and parent company; representative of state capital, representative of enterprise capital at the company and parent company".

An expert said that a public joint stock company is no longer an enterprise owned by an individual. Therefore, the law has strict regulations on transparency, information disclosure, and operation methods, and the establishment of a human resource mechanism to ensure the public nature of that enterprise.

The above regulation limits and eliminates acts of "family rule", ensuring democracy and the legitimate rights of the majority of shareholders are implemented in accordance with the law and charter of public joint stock companies.

Regarding TNG, this is a large textile and garment enterprise in Vietnam with annual revenue of thousands of billions. As of 2023, TNG had revenue of more than 7,000 billion VND.

Source: https://tuoitre.vn/mot-cong-ty-may-lon-cua-viet-nam-bi-phat-vi-bo-la-chu-tich-con-lam-tong-giam-doc-20250101110843162.htm