Lotte Group Withdraws: Sunshine-DIA Consortium Eyes Takeover of VND 20.1 Trillion Thu Thiem Eco Smart City Project – What Does the Department of Finance Say?

On September 25, the Ho Chi Minh City Department of Finance announced that it had received a document from the Office of the HCMC People’s Committee regarding the joint venture between Sunshine Group Joint Stock Company and DIA Investment Joint Stock Company (referred to as Sunshine – DIA). The document permits the continuation of the Smart Complex Project (Thu Thiem Eco Smart City) in Functional Area 2a, Thu Thiem New Urban Area, An Khanh Ward, HCMC.

However, upon review, the Department of Finance stated it lacks sufficient grounds to consider the joint venture’s request. The reason provided is that although Lotte Properties HCMC LLC expressed its intention to terminate the project contract, Lotte remains the legal investor on record.

Previously, Lotte Properties HCMC LLC, a subsidiary of South Korea’s Lotte Group, submitted a notice to terminate the Thu Thiem Eco Smart City project contract. Nonetheless, according to investment laws, if an investor decides to cease project operations, they must follow the legal procedures for terminating the investment project.

To date, the Department of Finance has not received any termination documentation from Lotte Properties HCMC LLC. Therefore, by principle, Lotte Properties HCMC LLC remains the investor responsible for the Thu Thiem Eco Smart City project, as per the legal project approvals granted by competent authorities.

The Thu Thiem Eco Smart City Smart Complex Project is led by Lotte Properties HCMC LLC, a subsidiary of South Korea’s Lotte Group. With a total investment of VND 20.1 trillion, the project spans 74,513 square meters, including approximately 50,000 square meters designated for development.

Nearly eight years after signing the investment contract and three years following the groundbreaking ceremony, this billion-dollar project remains stalled due to financial obligations and legal procedural hurdles.

In June, the project’s land value was approved at over VND 16.19 trillion. Lotte cited prolonged land appraisal processes and changes in legal policies as reasons for increased investment costs, altered project conditions, and the decision to terminate the contract, deeming further implementation unfeasible.

During a recent National Assembly Standing Committee meeting, Phan Van Mai, Chairman of the National Assembly’s Economic and Financial Committee, noted that Lotte’s withdrawal from the Thu Thiem project could lead to inefficiencies, as the land may remain unused for years, negatively impacting the investment and business environment.