DLGL group protests ‘illegal’ court decision on opening bankruptcy proceedings

Duc Long Gia Lai Group JSC (DLGL) has lodged a complaint to the People’s Court of Gia Lai province in Vietnam's Central Highlands, saying the court's decision to open bankruptcy proceedings against it goes against current regulations.

The People’s Court of Gia Lai, where the group is headquartered, issued the decision on October 9 in response to a request by contractor Lilama 45.3 Joint Stock Company (L43) relating to DLGL’s late repayment of a VND20 billion ($817,800) debt.

In protesting the court’s decision, DLGL general director Nguyen Tuong Cot said that at the request of the court, on August 9, 2023, the group had explained its debt settlement with Lilama 45.3 and demonstrated its solvency with financial reports for 2021, 2022 and the first six months of 2023. All the submitted documents showed that the business was capable of repaying its debts, he said.

"DLGL is a public company with its shares listed on the Ho Chi Minh Stock Exchange (HoSE) as DLG with nearly 50,000 shareholders and is operating normally in accordance with current legal regulations.

"The company has total assets of over VND10 trillion ($408.9 million) and enough financial resources to repay debts from production and business activities as well as quite large receivables from partners and customers. The debt to Lilama 45.3 is very small compared to our company's total assets," Cot wrote in the complaint.

He claimed that his company “has been very willing” and taken every measure to negotiate the debt settlement with Lilama 45.3.

"Currently, DLGL is gradually repaying Lilama 45.3 in accordance with a civil judgment enforcement decision, so the Gia Lai People's Court decision to open bankruptcy procedures goes against regulations," he stressed.

DLGL has made many contributions to and exerted great socio-economic influence on Gia Lai province and the Central Highlands in particular and the country in general, creating jobs for more than 15,000 workers, Cot noted.

“Lilama 45.3’s request to open bankruptcy proceedings against DLGL is aimed at creating pressure and lowering our company’s reputation,” he said, stressing that it has affected the work and life of employees as well as the group’s payments to the state budget.

Based on the Law on Bankruptcy 2014 and a dispatch dated December 18, 2020 by the Supreme People's Court on announcing the results of addressing problems in handling bankruptcy, DLGL is not subject to opening bankruptcy procedures, Cot asserted.

Therefore, he added, the People's Court of Gia Lai province should revoke the decision on the grounds of it not being consistent with current regulations.

Under the decision, within 30 days, the creditor must submit a debt collection form and other documents to the judge conducting bankruptcy proceedings.

After the 30-day period, the court will take a decision based on the documents and other evidence in the bankruptcy file.

The DLG share hit its floor price as it closed Friday at VND2,420 ($0.01).