Nearly 500 illegal houses built, stocks hit the floor, what does the investor explain?

LDG Investment JSC, chaired by Mr. Nguyen Khanh Hung, spoke out immediately after LDG shares hit the floor.

In the trading session on May 30, LDG shares hit the floor price of VND4,390/share. A total of more than 23 million LDG shares were traded, worth more than VND102 billion.

Previously, on May 29, the Investigation Agency of Dong Nai Province Police issued a decision to initiate a case to investigate the act of taking advantage of position and power while performing official duties that occurred at the Tan Thinh residential area project (commercial name is Viva Park) invested by LDG.

According to LDG's explanation, on April 7, the People's Committee of Dong Nai province organized the announcement of the inspection conclusion of the People's Committee of Dong Nai province on the Tan Thinh residential area project and conveyed it to the public through media agencies and newspapers.

This prosecution aims to clarify the violations of a number of individuals and organizations according to the content of the Proposed handling measures according to the Inspection Conclusion.

The prosecution of the case by the Investigation Agency of Dong Nai Provincial Police is the next step to clarify the violations of a number of individuals and organizations.

*LDG informed after the Investigation Police Agency of Dong Nai Province Police initiated a case of illegal construction of nearly 500 houses at Tan Thinh Residential Area project. (Photo: Nguyen Nam)*

According to LDG, on the enterprise side, the inspection conclusion clearly stated the company's administrative violations including construction without completing infrastructure licensing procedures, not fully supplementing construction design documents, lacking documents related to infrastructure construction activities, and administrative violations in the process of land exploitation and use.

The authorities have issued a decision to impose an administrative penalty on land construction permits. The enterprise has complied with the administrative penalty payment of more than VND 6.5 billion to the State Treasury.

The People's Committee of Dong Nai province has also requested that in the coming time, enterprises must supplement the missing procedures on construction activities, land procedures and related legal procedures to promptly complete administrative procedures according to regulations and report to relevant authorities on the progress of implementation. At the same time, no transactions of the project are allowed until the procedures related to the sale of future houses are completed.

With this Inspection Conclusion, Tan Thinh residential area project will continue to supplement procedures to complete the project.

LDG said that the company is continuing to carry out additional procedures according to regulations and report to the authorities according to the Inspection conclusion to soon complete the project's legal procedures and deploy business in accordance with legal procedures.

Tan Thinh residential area was introduced to the market with the commercial name Viva Park. Started in the second quarter of 2018, the project has a scale of 680 townhouses and ready-built villas and a total investment of nearly 1,179 billion VND.

LDG was previously known as a business related to Dat Xanh Group (DXG).

LDG was officially established by changing its name from Long Dien Real Estate JSC in 2015. Its charter capital increased from 50 billion VND to 750 billion VND 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).

However, since mid-2020, Dat Xanh Group (DXG) has divested from LDG. DXG 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 subsidiaries 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's large group sold 88 million LDG shares, equivalent to 36.72% of LDG's charter capital, and lost hundreds of billions of VND.

This is quite a surprising development because the investment in LDG is considered a strategic investment of DXG. LDG is considered to have quite good prospects with many large projects.

On May 18-19, Chairman of the Board of Directors Nguyen Khanh Hung had nearly 5 million more shares sold, reducing his ownership ratio to below 5%. He is also the last major shareholder of LDG. This also means that LDG no longer has any major shareholders, all are small shareholders.

Rare thing in a company that built 500 houses without permission, the Chairman was sold off the mortgage . The investor of the project that built nearly 500 houses without permission in Dong Nai has no major shareholders after Chairman of the Board of Directors Nguyen Khanh Hung was sold off the mortgage of nearly 5 million more shares.

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