The inspection concluded that the Company fulfilled its obligations as a registered organization regarding the inspection’s scope. However, some violations and shortcomings were identified.
A series of information disclosure violations
During the inspection period, DFF failed to disclose information as required by law. Specifically, the Company did not publish the following documents on the SSC’s system: Q1, Q2, Q3, and Q4/2022 and 2023 standalone financial statements; 2022 and 2023 semi-annual reviewed standalone financial statements; and 2021 audited standalone financial statements.
Several other documents were not disclosed on either the SSC’s or the HNX‘s system, including: Resolution No. 230126/2023/NQ-HĐQT dated January 26, 2023, approving the 2022-2023 business plan and the loan agreement with Agribank; Resolution No. 220601.01/2022/NQ-HĐQT dated June 1, 2022, approving related-party transactions; Resolution No. 220421/2022/NQ-HĐQT dated April 21, 2022, approving a loan to Vĩnh Hoá Company – a subsidiary; and Resolutions No. 220503.01/2022/NQ-HĐQT dated May 3, 2022, and No. 220103.01/2022/NQ-HĐQT dated January 3, 2022, approving related-party transactions.
The Company also disclosed information beyond the deadline to the SSC, HNX, and on its website for the following documents: Explanation for Q1/2024 financial statements (loss-making), 2022 audited financial statements (10% variance), 2022 annual report, 2022 audited standalone and consolidated financial statements, explanation for the auditor’s exception opinion on 2022 consolidated financial statements, explanation related to 2022 semi-annual reviewed financial statements (variance before and after review), the record date for the 2022 annual general meeting of shareholders on May 19, 2022, the Enterprise Registration Certificate amendment confirmation dated July 11, 2024, and the Company’s Charter approved by the 2024, 2023, and 2022 annual general meetings of shareholders on June 25, 2024, June 9, 2023, and October 3, 2022, respectively.
Specifically, for the SSC’s and HNX‘s disclosure portals, DFF disclosed information beyond the deadline for several documents, including: Q1/2024 consolidated financial statements, Resolution No. 210818.01/NQ-HĐQT-2021 dated August 18, 2021, approving the issuance of bonds worth VND 150 billion, and Resolution No. 103/NQ-HĐQT-2021 dated December 30, 2021, approving the issuance of bonds worth VND 300 billion.
Additionally, DFF incompletely disclosed the minutes of the resolutions in the 2022, first-half 2023, and first-half 2024 management reports. The Company did not fully present the minutes of each Board of Directors’ resolution. Specifically, the 2022 management report omitted the decisions on approving the Company’s Charter and the resolution on transferring the right to use land, own houses, and other assets attached to the land.
In the notes to the 2023 semi-annual reviewed standalone financial statements, DFF recorded advances and repayments of VND 4.6 billion with Board member Nguyễn Thị Thùy Linh. However, this was not mentioned in the first-half 2023 management report. Regarding the first-half 2024 management report, despite the occurrence of a transaction to transfer a car to Ms. Trần Thị Hồng Nhung – a related party of the Chairman of the Board of Directors, Lê Duy Hưng – in the resolution dated March 22, 2024, the Company did not disclose this in the management report.
Furthermore, DFF disclosed misleading information about the after-tax profit indicator in the Q4/2021, Q4/2022, Q4/2023, and Q2/2024 standalone and consolidated financial statements compared to the 2021, 2022, and 2023 audited financial statements and the 2024 semi-annual reviewed financial statements.
Specifically, the after-tax profit for 2021 in the Q4/2021 standalone and consolidated financial statements was nearly VND 20.5 billion and nearly VND 16.8 billion, respectively, while the audited financial statements showed figures of over VND 25.8 billion and over VND 25.1 billion, respectively. The after-tax profit for 2022 in the Q4/2022 standalone financial statements was VND 21.3 billion and over VND 21 billion, respectively, but the audited financial statements reported only VND 3.7 billion and nearly VND 2 billion, respectively. The after-tax profit for 2023 in the standalone and consolidated financial statements was nearly VND 120 billion and a loss of nearly VND 124 billion, respectively, while the audited financial statements reported losses of approximately VND 199 billion for both. For the first half of 2024, the standalone and consolidated financial statements for Q2/2024 both reported losses of over VND 60.6 billion, but the semi-annual reviewed financial statements showed a profit of VND 135 billion and a loss of VND 135 billion, respectively.
In the 2022 and 2023 management reports, the Company stated that the number of Board of Directors’ meetings for the year was 25 and 11, respectively. However, according to the documents provided by the Company, the total number of Board of Directors’ meetings in 2022 was 26, and in 2023, it was 12.
Provision of loans contrary to regulations
According to Decree No. 155/2020/NĐCP, public companies are not allowed to provide loans or guarantees to related parties of organizational shareholders, except for companies within the same corporation or companies operating as a group, including parent-subsidiary or economic groups. Such transactions must be approved by the general meeting of shareholders or the Board of Directors as per regulations.
On April 21, 2022, DFF signed a loan agreement with its subsidiary, Vĩnh Hóa Company, which is also a related party of Mr. Lê Văn Thịnh, a shareholder of the Company and the Director of Vĩnh Hóa. DFF loaned over VND 3.2 billion to Vĩnh Hóa for a term of 12 months (due on April 21, 2023, with a 0% interest rate). Subsequently, on April 20, 2023, and April 20, 2024, the Company signed supplements to extend the debt repayment period by another year.
This transaction was approved by the Board of Directors in Resolution No. 220421/2022/NQ-HĐQT dated April 21, 2022. The 2023 semi-annual reviewed financial statements mentioned that on May 23, 2023, the Board of Directors passed a resolution on the transfer of VND 17.7 billion in capital contribution at Vĩnh Hóa (59% of charter capital). On May 24, 2023, the transfer was completed, making Vĩnh Hóa an associated company with a 40% ownership stake. From this date, Vĩnh Hóa Company was no longer a subsidiary of DFF but remained a related party of the Company’s shareholder, Mr. Lê Văn Thịnh.
On December 12, 2023, DFF also signed a loan agreement with Logistics Lê Gia JSC, a related party of Mr. Hoàng Hiệp, a shareholder of the Company. Accordingly, DFF loaned VND 35 billion to Lê Gia for a term of 12 months (due on December 12, 2024) at an interest rate of 10%.
The 2023 audited standalone financial statements and the 2024 semi-annual reviewed financial statements recognized that the Company had outstanding loans to Vĩnh Hóa of over VND 3.2 billion and to Lê Gia of VND 35 billion. The SSC determined that providing loans to these two companies was contrary to the provisions of Decree No. 155/2020/NĐ-CP.
Violations in bond information disclosure
The SSC’s conclusion was that DFF did not submit the pre-buyback information disclosure documents for the DFFH2123001 bond to HNX on November 25, 2022. The Company also disclosed documents to HNX beyond the deadline, including: 2024 semi-annual standalone and consolidated financial statements; Semi-annual report on the implementation of commitments for 2024; Semi-annual audited report on the use of proceeds from bond issuance for 2024; and Semi-annual report on principal and interest repayment for 2024.
Additionally, the SSC determined that DFF disclosed misleading information in the semi-annual report on the implementation of commitments to bondholders for 2022, 2023, the first half of 2023, and the first half of 2024.
Regarding the violations in information disclosure, the Inspectorate recommended that the SSC consider handling the violations in accordance with the law. At the same time, the Company was requested to rectify the information disclosure on the SSC’s and HNX‘s portals and its website, supplement the content of the violating reports, ensure accurate information disclosure, and make appropriate amendments in the financial statements and management reports.
Regarding securities offerings, the Company should strictly comply with legal regulations, take responsibility for the accuracy, truthfulness, and completeness of the content of reports and documents related to the collection of proceeds from the private placement of shares in 2022, adhere to regulations on private placements of corporate bonds, and fulfill the responsibilities of the bond issuer in managing and utilizing proceeds from bond issuances.
– 15:19 21/04/2025
