On September 13, 2024, the State Securities Commission (SSC) issued Decision No. 990/QD-UBCK to suspend all activities of HVS Vietnam Securities Joint Stock Company.
The reason given by the SSC for the suspension was the company’s failure to maintain the physical infrastructure requirements as stipulated in Point d, Clause 1, Article 94 of the Securities Law.
HVS Vietnam Securities Joint Stock Company, formerly known as Hung Vuong Securities Joint Stock Company, was established in 2008. The company is headquartered at 31, Street 9, Nam Long Residential Area, Group 7B, Ward 1, Tan Thuan Dong Ward, District 7, Ho Chi Minh City.
HVS Vietnam offered a range of securities business activities, including securities brokerage, securities investment consulting, securities depository, and corporate financial consulting. Its charter capital currently stands at over VND 50 billion.
Prior to the suspension, HVS Vietnam Securities Joint Stock Company had been fined a total of VND 210 million for two separate violations. The first fine of VND 125 million was imposed according to Point a, Clause 2, Article 25 of Decree No. 156/2020/ND-CP dated December 31, 2020, due to the company’s change of headquarters address without obtaining written approval from the SSC.
The second fine, amounting to VND 85 million, was based on Clause 3, Article 43 of Decree No. 156/2020/ND-CP, as amended and supplemented by Point a, Clause 34, Article 1 of Decree No. 128/2021/ND-CP. This penalty was issued because the company failed to report to the SSC a plan approved by its Board of Directors to address its non-compliance with the conditions for the grant of a license for establishment and securities business activities.
According to its reviewed semi-annual financial statements, HVS Vietnam recorded operating revenue of VND 201 million (compared to nearly VND 414 million in the same period last year) and a pre-tax loss of nearly VND 266 million (compared to a profit of VND 203 million in the previous year). As a result, the company’s accumulated loss as of June 30 increased to VND 39.3 billion.
Notably, in this audit report, the auditing unit noted that HVS is awaiting SSC approval for changes to its headquarter address and charter capital increase as stipulated by regulations. Consequently, the company only generated revenue from interest on investments held to maturity.
HVS has submitted a proposal to the SSC to increase its charter capital through the issuance of shares to existing shareholders and the issuance of shares to meet the foreign ownership ratio. The planned capital raise aims to increase the charter capital from VND 50.2 billion to VND 300.2 billion, with a total expected capital mobilization of VND 250 billion. The specific timing of the issuance will be decided by the Board of Directors after obtaining SSC approval.
Currently, the SSC is reviewing the approval for the change of headquarters and charter capital increase, raising questions about the company’s ability to continue its operations.
However, in the mid-term report, there were no indications for the Board of Directors and the Board of Management of HVS to believe that the company would not obtain the SSC’s approval to continue its operations. Therefore, the mid-term financial statements of HVS were prepared based on the assumption that the company will continue its operations.
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