In a surprising turn of events, RDP stock of Rạng Đông Holding JSC soared against the stagnant broader market. A surge in buying interest drove the share price to its daily limit of 2,450 VND per share, with sellers virtually absent.
Notably, RDP’s impressive rally followed a string of lackluster trading sessions, plunging to historical lows. From July 11 to July 30, RDP witnessed a steep decline, with multiple consecutive trading sessions hitting the floor, pushing the share price to a historical low of 2,200 VND per share, equivalent to a 76% drop since the beginning of the year.
Chairman Sold Nearly 39% of the Company’s Shares in One Year
The rapid plunge in the share price led to consecutive forced sales of RDP shares held by Mr. Hồ Đức Lam, Chairman of Rạng Đông Holdings’ Board of Directors. In the latest notification, Mr. Hồ Đức Lam had 1.17 million RDP shares, equivalent to 2.39% of the charter capital, forcibly sold by the securities company. After this transaction on August 1, Mr. Lam’s ownership decreased from 4.1 million units (8.48% of capital) to 2.9 million units (6.09%).
Mr. Lam remains the largest shareholder of Rạng Đông Holding. In the past, at the end of 2020, he owned up to 64.2% of the company’s capital.
However, from August 2023 to the present, in addition to forced sales, Mr. Lam also actively sold RDP shares, reducing his ownership in Rạng Đông Holding from 45% to 6.1% currently. Thus, within just one year, the Chairman of Rạng Đông Holding has sold a total of more than 19 million shares, equivalent to nearly 39% of the capital.
The consecutive forced sales of the Chairman’s shares by the securities company occurred amid the enterprise’s sinking losses. Specifically, RDP recorded a nearly 9% decline in revenue to VND 2,594 billion and a post-tax loss of VND 147 billion in 2023. In the first half of 2024, Rang Dong continued to lose nearly VND 65 billion. As of June 30, Rang Dong Holding had accumulated losses of VND 266 billion.
Loss in Lawsuit Against Foreign Shareholder Plunges the Company into Turmoil
From another perspective, the event marking the turning point for the company’s downward spiral was Rạng Đông Holding’s loss in a lawsuit against foreign shareholder Sojitz Planet Corporation (under the Japanese Sojitz Corporation) and the subsequent obligation to repay nearly VND 157 billion, along with related fees and charges. This lawsuit loss caused a sharp increase in Rạng Đông’s provisions, resulting in the company reporting losses for 2023.
Previously, in 2016, Rạng Đông signed a comprehensive trade cooperation agreement with Sojitz. Accordingly, Sojitz would provide raw materials, transfer technology, management systems, and develop new products according to Japanese standards for Rạng Đông. In 2017, Rạng Đông and Sojitz held a ceremony to sign a strategic shareholder agreement. Additionally, Sojitz purchased five million ordinary shares, which were issued and fully paid for at Rạng Đông Long An Plastic Joint Stock Company, at a purchase price of over VND 174 billion.
However, according to Sojitz, after the transfer of the above shares, Rạng Đông violated several post-transfer obligations. Therefore, based on the share purchase agreement, Sojitz exercised its right to terminate the contract and requested Rạng Đông to immediately refund 90% of the share purchase price paid, equivalent to nearly VND 157 billion.
As Rạng Đông failed to make the refund, Sojitz initiated a lawsuit at the Singapore International Arbitration Center (SIAC). On July 6, 2022, the SIAC Arbitration Council ruled in favor of Sojitz. The defendant, Rạng Đông, was ordered to pay Sojitz the sum of nearly VND 157 billion in damages and 10% interest per annum on this amount from April 1, 2020, until the payment date. Additionally, Rạng Đông had to bear the fees and charges of the arbitration council, as well as the administrative fees and charges of the SIAC, amounting to hundreds of millions of VND.
The lawsuit dragged on until the end of 2023, as the People’s Court of Ho Chi Minh City decided not to recognize the SIAC arbitral award. However, after reconsideration, the Ho Chi Minh City High People’s Court decided to accept Sojitz’s appeal, recognizing and enforcing the aforementioned international arbitral award in Vietnam.
