UDEC fined 92.5 million VND for violating information disclosure

UDEC listed its shares on the stock exchange in 2010 but the shares were delisted in 2023. The company's loss-making situation has lasted from 2019 to present.

On September 17, 2024, the State Securities Commission (SSC) issued a decision on administrative sanctions in the field of securities and the securities market against Ba Ria - Vung Tau Urban Development and Construction Joint Stock Company (code UDC, UPCoM floor) (Address: No. 37, 3/2 Street, Ward 8, Vung Tau City, Ba Ria - Vung Tau Province).

Accordingly, this unit was fined 92.5 million VND for failing to disclose information that must be disclosed according to legal regulations. UDEC did not disclose information about the Notice of signing the audit contract for the 2023 Financial Statements; disclosed information not on time according to the legal regulations on financial statements and explanatory documents...

Specifically, these documents include the audited semi-annual financial report for 2023, the information statement signed by Deputy General Director Mai Ngoc Dinh on November 20, 2023, the audited financial report for 2023, the annual report for 2023, the document explaining the audit organization's exception opinion on the 2023 financial report, the document explaining the reason for the difference in after-tax profit in the 2023 financial report before and after auditing, the document explaining the reason for the loss in after-tax profit in the 2023 financial report.

Ba Ria - Vung Tau Urban Development and Construction Company has a charter capital of 350 billion VND. The company was established on June 22, 1995. In 2008, Ba Ria - Vung Tau Urban Development and Construction Company conducted an initial public offering through a share auction.

On July 5, 2010, UDC shares were officially listed on the Ho Chi Minh City Stock Exchange (HoSE). However, on May 12, 2023, UDC shares were delisted on HoSE because the company had production and business results that were losses for 3 consecutive years, which is a case of securities being delisted according to regulations. On May 23, 2023, 35 million UDC shares were traded on the UPCoM market with a reference price of VND 3,300/share. Currently, UDC shares are trading at around VND 3,700/share.

In terms of business performance, the company recorded net revenue of VND90.4 billion in the first half of 2024, 2.7 times higher than the same period last year. However, the cost of goods sold remained high, causing gross profit to only reach VND376 million, but this was still better than the gross profit loss of VND5.1 billion in the same period.

Financial revenue was only VND41 million, while financial expenses amounted to VND16.3 billion. As a result, the company continued to lose VND29.4 billion after the first half of 2024, a slight increase compared to the loss of VND29.3 billion in the same period last year.

The semi-annual financial report of this unit recorded that the auditor was concerned about the company's ability to continue operating. As of June 30, 2024, UDEC had VND66.7 billion in outstanding production and business expenses and VND14.4 billion in receivables of unknown recoverability. As of June 30, 2024, the value of unfinished construction pending finalization or temporary suspension of construction was VND66.7 billion and outstanding receivables of VND14.4 billion had not been assessed for recoverability.

The company also recorded a payable amount of VND39.5 billion for the enterprise restructuring support fund and VND25.7 billion in dividends payable for the state capital portion, and overdue interests have not yet been recorded. UDEC's accumulated loss as of June 30 was VND172.8 billion, with short-term debt of VND584.1 billion, exceeding short-term assets by VND81.3 billion. Overdue debt amounted to VND231.8 billion. In recent audited and reviewed financial statements, the auditing firm emphasized the existence of material uncertainties that led to significant doubts about the company's ability to continue as a going concern.

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