FPT Capital sue HAGL maybe for the seven-year-ago problem

11:56 | 20/10/2018
FPT Capital brings HAGL to court either over its losses from the company's stocks or the chairman reneging on its promise to buy out its holding in HAGL.
fpt capital sue hagl maybe for the seven year ago problem
A dIspute related to FPT's capital contribution to HAGL may stand behind the lawsuit. Photo: Shutterstock

Local website bizlive.vn stated that the Central Highlands province of Gia Lai’s Pleiku People’s Court is handling a business dispute related to a capital contribution contract between plaintiff FPT Capital and defendants Duc and his firm HAGL in 2011.

According to FPT Capital’s consolidated financial statement in 2011, the firm received a 500,000-stock investment from HAGL’s subsidiary HAG Rubber JSC. The capital contribution contract between the two firms stipulated the value of each stock at VND51,000 ($2.2). Thus, HAG Rubber’s total capital contribution to FPT Capital was VND25.5 billion ($1.1 million).

At the time, HAG Rubber committed that its stocks would be listed before August 15, 2015. The contract also stated that in case the stocks are not listed as committed, HAGL has an obligation to purchase HAG Rubber’s entire stock volume at the price equalling the total capital contribution value of FPT Capital and 20 per cent internal rate of return (IRR).

In addition, the financial report also stated that six months after HAG Rubber’s stocks were listed, HAGL chairman Doan Nguyen Duc committed to buy the entire stock volume at the price equalling the capital contribution value of FPT Capital and 10 per cent IRR.

“FPT Capital leaders believed HAGL Rubber’s stocks will have good prospects and would definitely reach the same price if they were listed. In addition, Doan Nguyen Duc seemed completely capable to buy all stocks,” the report stated.

HAG Rubber’s shares (code: HAG) were officially listed on July 20, 2015, before August 15, 2015 as committed. Thus, HAGL did not purchase the entire stocks volume with 20 per cent IRR.

However, after listing, the stock did not rise as expected, fluctuating around VND30,000 ($1.3). At the trading session on January 20, 2016, half a year after the listing, the stock fell to VND23,000 ($1).

This leaves Duc’s promise to buy the entire stock volume as FPT’s only option to divest all stocks. However, with current the price of VND28,000 ($1.2), the total value of the stocks is only about VND14 billion ($608,695), nearly 45 per cent less than before.

Thus, the lawsuit may have been filed as a result of the low price of the stock or Duc reneging his obligation to buy.

By Van Anh

Based on MasterCMS Ultimate Edition Ver 2.8 2018
http://www.wqshingtonpost.com http://www.w88company.com http://www.eatsmiLephotograph.com http://www.1hu6v.asia http://www.888w88.com http://www.jandjbeautifiers.com http://www.icbrighttech.com http://www.whatsbrewinonline.com http://www.rosannahighton.com http://www.livesattamatka.net http://www.188w88.com http://www.mailman-handbook.com http://www.lombardigallery.com http://www.msvanpraagscLass.com http://www.1l6lu.asia