Phuc Son Corporation was established in 2004 in Tam Phuc commune, Vinh Tuong district, Vinh Phuc province. Originating from Phuc Son Trading and Construction Co., Ltd, the company primarily operates in real estate and construction business.
At the time of establishment, the corporation had a charter capital of 129.8 billion VND. The founding shareholders include Mr. Nguyen Van Hau (contributing 10,789 billion VND, equivalent to 84.6% of the charter capital), Ms. Ngo Thi Thanh Nhan (contributing 15 billion VND, equivalent to 11.5% of the capital) and Mr. Nguyen Thanh Tung (contributing 5 billion VND, equivalent to 3.9% of the capital).
Later, in January 2015, the company increased its charter capital to 500 billion VND, with a legal capital of 6,000 billion VND. In this increase, Mr. Hau contributed 480 billion VND, increasing his ownership to 96%. The capital contribution of the other two shareholders remained unchanged.
In November 2015, the corporation continued to increase its capital to 1,500 billion VND, with Mr. Hau contributing 1,480 billion VND. Then, in February 2017, the company registered to increase its capital to 2,000 billion VND, with Mr. Hau contributing 1,980 billion VND (99% of the charter capital).
Phuc Son Corporation.
However, by May 2022, the charter capital of the company had decreased to only 1,600 billion VND.
Phuc Son Corporation is one of the largest businesses in Vinh Phuc province. Phuc Son is associated with the name of millionaire Nguyen Van Hau (also known as Hau “Phao”, born in 1981).
Phuc Son holds many large projects such as the Phuc Son Commercial Center and Residential Area (Vinh Tuong) with a scale of 130 hectares; a 15-storey low-income housing area (Vinh Yen); a 149-hectare urban area on both sides of Phu Dong Street (Viet Tri, Phu Tho province).
Despite owning and implementing many projects worth billions of VND, the business results of Phuc Son Corporation have declined over the years.
In 2016, the company recorded a revenue of 514.6 billion VND and a net profit of 3.7 billion VND. In 2017, the revenue decreased to 468.3 billion VND, but the profit increased by 10 times to 37.58 billion VND. In 2019, the revenue was only 65% compared to 2018, reaching 84.7 billion VND, and the net profit plummeted to 80 million VND compared to 214 million VND in the previous year.
Especially, according to the 2020 financial report, one of the major issues that Phuc Son Corporation has to face is the high level of outstanding debts exceeding the capital.
Specifically, at the end of 2020, the outstanding debts of Phuc Son Corporation amounted to 5,814 billion VND, 2.9 times higher than the owner’s equity and accounting for 74.6% of the total capital of the corporation.
Among them, long-term outstanding payables accounted for the highest proportion, reaching 5,546 billion VND, equivalent to 95.4% of the total outstanding debts.
Meanwhile, the revenue from sales and services in 2020 of Phuc Son Corporation was only 60.9 billion VND. This means that a significant amount of money that the corporation received from customers has not been recognized as revenue and is “anchored” in the “Outstanding Debts”.
The cash flow statement also shows a significant inflow of funds in 2020. Other income from business activities amounted to 468 billion VND.
Since the inflow of funds is not recorded as revenue, Phuc Son Corporation recorded a pre-tax loss of 16.9 billion VND. Throughout the year, the company only paid 112 million VND in corporate income tax expenses.
On February 26, the Investigative Agency of the Ministry of Public Security initiated an investigation into the case of “Violations of accounting regulations causing serious consequences” at Phuc Son Corporation, Thang Long Investment and Trading Corporation, and related units.
The investigation agency also made decisions to initiate legal proceedings, temporarily detain Nguyen Van Hau – Chairman of the Board of Directors of Phuc Son Corporation; Nguyen Thi Hang (Deputy General Director of Phuc Son Corporation); Do Thi Mai (Chief Accountant of Phuc Son Corporation); Hoang Thi Tuyet Hanh (Accountant, Phuc Son Corporation); Tran Huu Dinh (Director of Nam A Group Investment Corporation); Nguyen Hong Son (freelancer).
The above-mentioned defendants were indicted for forging, falsifying, and concealing accounting records of revenue, related assets, causing particularly serious damage to the state.
