Investors fled nearly 200 billion VND

During the trading session on August 17, investors fled from LDG shares of LDG Investment JSC after the Ho Chi Minh City Stock Exchange (HOSE) announced the complete cancellation of the sale of more than 2.6 million LDG shares made on August 15 by Mr. Nguyen Khanh Hung, Chairman of the Board of Directors.

The reason for the cancellation is because Mr. Hung traded stocks but did not report or disclose information before making the transaction as required by law.

At the end of the trading session on August 17, LDG shares fell to the limit allowed with over 25.5 million units remaining for sale at the floor price, not counting the number of shares placed for sale via ATC orders. Nearly 6.5 million shares were fully matched at the floor price, executed sporadically during the session.

Thus, if only counting the number of matched shares and the number of shares remaining for sale at the floor price, the total value has reached nearly 200 billion VND. Investors are fleeing a real estate company that once had many periods of turbulence on the stock market.

Recently, investors have been very upset with the cases of illegal selling in the stock market. The illegal selling activities that have occurred in recent years have caused many people to suffer losses, while the leaders of some enterprises have violated the law many times and have given unreasonable explanations.

At many securities companies, the software has updated the list of insider and related person accounts on the trading system. When a customer places a securities transaction order, the system will warn the customer that the customer is an insider or related person subject to information disclosure before trading.

Explaining the secret sale of shares, Mr. Nguyen Khanh Hung said that on August 15, he had sold more than 2.6 million LDG shares, but because he was on a business trip from August 8 to 15, he could not directly make the information public.

Instead, he assigned the secretary to carry out the information disclosure, but because the new staff did not fully understand the regulations, it led to errors and delayed the information disclosure process.

*LDG used to be a real estate company that made waves on the stock market.*

“Without” major shareholders, LDG is increasingly at a disadvantage

Mr. Hung's capital sale took place in the context of LDG's stock price recovering, increasing nearly 50% compared to the beginning of the year.

However, the company has faced a lot of negative news recently.

In the second quarter of 2023, LDG reported revenue of just over 300 million VND and a loss of 74 billion VND, increasing its net loss in the first 6 months of 2023 to more than 144 billion VND.

Recently, the Board of Directors of LDG has decided to extend the time to hold the 2023 Annual General Meeting of Shareholders (3rd time) until August 31, 2023. Previously, the 1st and 2nd general meetings of this enterprise could not take place due to insufficient participation rate according to regulations.

Mr. Hung is currently Chairman of LDG and holds nearly 18.6 million LDG shares, equivalent to 7.25% as of the end of 2022.

Recently, Mr. Hung had many shares sold for mortgage. On May 18-19, Mr. Hung had nearly 5 million shares sold for mortgage by a securities company. After the transaction, Mr. Hung's share ownership ratio at LDG decreased from 5.86% to 3.92%, officially no longer a major shareholder at LDG. In April, Mr. Hung had more than 3.5 million LDG shares sold for mortgage on April 13-14.

Also in May, LDG shares plunged several times due to information about the prosecution of the illegal construction of nearly 500 houses at the Tan Thinh Residential Area project in Dong Nai province, invested by LDG. According to the financial report, by the end of 2022, the inventory of the Tan Thinh Residential Area project was VND 463.5 billion, accounting for 38.4% of the total inventory of LDG Investment. This is the project with the largest inventory value of this enterprise.

LDG Investment JSC was established by changing its name from Long Dien Real Estate JSC in 2015. Its charter capital increased from VND 50 billion to VND 750 billion and was listed on the Ho Chi Minh City Stock Exchange.

In 2016, Le Ky Phung, Chairman of the Board of Directors and founder of LDG, withdrew. Mr. Phung was replaced by Mr. Nguyen Khanh Hung, who was then a member of the Board of Directors and Deputy General Director of Dat Xanh Real Estate Services and Construction JSC (currently Dat Xanh Group).

Since then, Dat Xanh has been the largest shareholder group at LDG Group. Since then, LDG Group has always been considered the shadow of Dat Xanh Group. Since 2017, LDG has entered the apartment segment in Ho Chi Minh City when launching apartment projects under the Intela brand such as Saigon Intela, High Intela and West Intela. There are also projects in neighboring provinces.

However, in mid-2020, Dat Xanh (DXG) suddenly divested from LDG when it decided to sell all of its nearly 63 million shares, equivalent to 26.27% of its capital at LDG. At the same time, DXG's subsidiary, Ha Thuan Hung Construction Trading Service Co., Ltd., also registered to sell all of its more than 25 million LDG shares, equivalent to 10.45% of LDG Investment's charter capital.

In total, Dat Xanh group sold 88 million shares of LDG JSC they were holding, equivalent to 36.72% of charter capital at LDG and lost about 500 billion VND.

This is quite a surprising development because the investment in LDG is considered a strategic investment of DXG and LDG has a real estate investment and development industry, similar to Dat Xanh and also has quite good prospects with the ownership of many large projects.

Cancel all share sale transactions of LDG Chairman Nguyen Khanh Hung. Ho Chi Minh City Stock Exchange said it will cancel the sale transaction of more than 2.6 million LDG shares of Chairman Nguyen Khanh Hung.

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