On December 3, 2024, the Department of Planning and Investment announced the termination of the FLC Group Joint Stock Company’s (listed on UPCoM: FLC) commercial, entertainment, and residential project with Notification No. 85/TB-SKHDT.
FLC Group’s commercial, entertainment, and residential complex
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The Kon Tum People’s Committee approved the investment proposal for this project in Official Dispatch No. 1952/UBND-HTKT dated July 31, 2019, and Official Dispatch No. 4165/UBND-HTKT dated November 5, 2020.
The project’s termination is a result of FLC Group’s decision to end the commercial, entertainment, and residential complex’s operations, as per Point a, Clause 1, Article 48 of the Investment Law.
FLC Group is responsible for finalizing the project liquidation procedures and fulfilling its investor obligations as per legal regulations. Additionally, Official Dispatch No. 1952 and Official Dispatch No. 4165 from the People’s Committee of Kon Tum will be rescinded, and their validity will end when this notification takes effect.
Known commercially as FLC Legacy Kon Tum, the FLC Group’s commercial, entertainment, and residential complex is located in Truong Chinh Ward, Kon Tum City. Spread across 18 hectares, the project had a publicized investment capital of VND 2,000 billion. Construction began in mid-August 2019, with an expected completion date in 2020.
Strategically located on Truong Chinh Street in the center of Kon Tum City, FLC Legacy Kon Tum was envisioned to become the most modern commercial, service, and residential complex in Kon Tum and the Central Highlands. The project was promoted to include shophouses, shop villas, apartment complexes, a 5-star hotel, a commercial entertainment center, an eco-park, a square, a school, a sports area, and an amusement park, among other amenities.
According to the Q3/2024 financial statements, FLC Group’s construction-in-progress costs for this project amounted to over VND 343 billion as of the end of September.
In November 2022, the Government Inspectorate (GI) announced the results of its inspection into the granting of land use rights certificates and ownership of houses and other assets attached to land in urban areas in Kon Tum Province. The inspection identified violations in the FLC Group’s nearly 18-hectare commercial, entertainment, and residential project. According to the GI, the Kon Tum People’s Committee’s decision to assign the task of selling assets on land and transferring land use rights through auctions to the Provincial Land Development Fund violated Decree No. 151/2017/ND-CP and the Law on Management and Use of Public Assets.
As of the time of the inspection (August 2020), more than a year after the Kon Tum People’s Committee approved the auction results and issued a decision on the sale of public assets to the sole registered buyer, FLC Group had not fulfilled its financial obligations. It was only on September 16, 2020, that FLC Group paid nearly VND 205 billion in auction winnings and nearly VND 21 billion in late payment penalties. This violation of the asset auction regulations and the purchase agreement was met with a lack of firmness and resolve from the People’s Committee in terms of handling and canceling the auction results.
Despite the project being incomplete, the Provincial Land Registration Office advised the issuance of land use rights certificates and ownership of houses and other assets attached to the land, illegally dividing the land area of nearly 7.2 hectares into 474 plots (including 472 adjacent lots, villas, and 2 commercial lots) and granting long-term land use rights certificates, contrary to the Land Law 2013 and Decree 43/2014/ND-CP. The GI recommended the revocation of these certificates and their reissuance in accordance with the law.
The People’s Committee of Kon Tum has instructed FLC Group to ensure the project’s progress and, in case of violations or delays, to terminate the project and revoke the land in accordance with the law. They have also directed the revocation and reissuance of land use rights certificates and ownership of houses and other assets attached to the land to FLC Group, in accordance with legal regulations.
*Thu Minh*
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