Since the end of January 2024, the GVR stock of Vietnam Rubber Industry Group – JSC (stock code: GVR) has been on a strong upward trend. In the past month, GVR’s stock has increased by over 30%, pushing the company’s market capitalization over 100,000 billion VND. However, the company has recently received some bad news.
On February 22, 2024, Vietnam Export-Import Commercial Joint Stock Bank Securities Company (VCBS) received Judgment No. 06/2024/KDTM-PT from the High People’s Court in Ho Chi Minh City dated January 24, 2024 regarding the dispute of the Share Transfer Agreement between Dak R’Tih Hydropower Corporation (DaHC) and GVR, in which Vietnam Export-Import Commercial Joint Stock Bank Securities Company – Ho Chi Minh City Branch (VCBS-HCM) is the party concerned with rights and obligations.
Accordingly, the High People’s Court in Ho Chi Minh City decided that GVR and VCBS-HCM are jointly liable to reimburse DaHC with an amount of over 141.4 billion VND. This is the amount that DaHC has deposited as a down payment at VCBS-HCM to secure the rights to purchase shares.
According to DaHC’s consolidated semi-annual financial report for 2021, on September 15, 2016, the parties including Dak R’Tih Hydropower Corporation, Bach Viet Production and Trading Limited Liability Company, Rong Viet Investment Limited Liability Company, TAD Saigon Investment Limited Liability Company, and Mr. Dang Chinh Trung signed a Cooperation and Investment Contribution Agreement.
Accordingly, the parties agreed to contribute capital and entrust Dak R’Tih Hydropower Corporation to represent the participating parties to purchase the entire block of nearly 111 million shares of member hydropower companies of Vietnam Rubber Industry Group, including Geruco Song Con Hydropower Joint Stock Company, VRG Bao Loc Joint Stock Company, VRG Dak Nong Joint Stock Company, VRG Phu Yen Joint Stock Company, and VRG Ngoc Linh Joint Stock Company, with a total transfer value of 1,416 billion VND.
The capital contribution ratios of the parties to implement the project are as follows: Dak R’Tih Hydropower Corporation 15%; Bach Viet Production and Trading Limited Liability Company 47.5%; Rong Viet Investment Limited Liability Company 17.5%; TAD Saigon Investment Limited Liability Company 10%; and Mr. Dang Chinh Trung 10%.
Dak R’Tih Hydropower Corporation won the bid. Vietnam Rubber Industry Group and Dak R’Tih Hydropower Corporation signed the transfer agreement on December 8, 2016. However, due to the failure to implement the commitments under the contract, on December 30, 2019, the company filed a lawsuit against Vietnam Rubber Industry Group with the People’s Court of Ho Chi Minh City, demanding the refund of the deposit and compensation for damages resulting from contract violations.
According to the first-instance judgment No. 581/2021/KDTM-ST dated April 26, 2021 regarding the dispute of the share transfer contract, the Court accepted the plaintiff’s request, including: Cancelling the share transfer agreement; Compelling GVR to refund DaHC an amount of over 141 billion VND; Requiring GVR to pay a penalty for contract violation of over 113 billion VND; Requiring GVR to compensate DaHC for losses of over 45 billion VND.
Vietnam Rubber Industry Group recorded in 2023 a net revenue of 22,080 billion VND and a net profit after tax of 3,370 billion VND, a decrease of 13% and 30% respectively compared to 2022. As of December 31, 2023, GVR’s total assets amounted to 78,385 billion VND, with cash and bank deposits of 16,904 billion VND. Equity reached 54,854 billion VND.
