Regulator cancels $437 million bond issuance by property developer

According to the SSC, companies under the Tan Hoang Minh Group – Viet Star Real Estate Investment Company Limited, Winter Palace Joint Stock Company and Soleil Hotel Service and Investment Joint Stock Company – submitted false information and concealed relevant information when issuing private bonds.

These companies issued private bonds to raise capital of more than VND10 trillion from July 2021 to March 2022. All these companies are unlisted.

This cancellation is unprecedented and comes after the group successfully mobilized funds from bondholders. It enjoins bond registration and depository organizations to cease ownership transfer of Tan Hoang Minh bonds in these nine issuances. However, it is unclear how the matter of bondholders and refunding their money will be handled.

The obligation to disclose information to the issuer is a provision in Decree 153, which governs private bond offerings and trading.

Accordingly, issuers who fail to comply with regulations will be administratively sanctioned or investigated for criminal liability, depending on the nature and the severity of their violations.

Tan Hoang Minh attracted a lots of attention recently for bidding to buy a land lot in HCMC’s Thu Thiem Peninsula for VND2.45 billion ($108,000) per square meter late last year. However, the company decided to pull out of the transaction in January, forfeiting its deposit of over VND588 billion.

Despite bidding for over VND24.5 trillion ($1 billion) on the 10,060-square-meter lot, Viet Star’s total assets were just over VND7.6 trillion by the end of 2020, and its equity over VND800 billion.

Viet Star’s total assets peaked in 2018 at just over VND17.3 trillion, which is still 30 percent less than the price it bid for the land lot.

Chairman Do Anh Dung owns nearly 51 percent of the Tan Hoang Minh Group, which has a charter capital of VND10 trillion. According to financial statements, the company’s total assets topped VND20 trillion by the end of 2020, with equity exceeding VND6.9 trillion.