Duc Giang Chemical chairman and son detained, DGC shares plunge

Police have detained chairman of Duc Giang Chemical Group, his son, and several executives as part of an investigation into alleged environmental, resource and accounting violations, sending the company’s shares sharply lower.

Legal proceedings were launched against chairman Dao Huu Huyen, his son, and 12 subordinates. Among them, Huyen and his son, along with five others, have been detained.

The Ministry of Public Security on Monday stated that its investigative agency has uncovered signs of serious legal violations at Duc Giang Chemical Group (HoSE: DGC).

The investigation has identified a series of alleged organized violations, including the illegal dumping of millions of tons of waste across dozens of hectares in the Tang Loong Industrial Park in Lao Cai province, causing environmental pollution and affecting local residents’ livelihoods.

Authorities also alleged the illegal extraction of hundreds of thousands of tons of apatite ore worth hundreds of billions of dong (VND100 billion = $3.8 million), along with accounting violations that concealed revenue and caused tax losses to the state budget amounting to tens of billions of dong (VND10 billion = $380,460).

The alleged violations are said to have taken place over an extended period, drawing public concern.

Dao Huu Huyen, chairman of Duc Giang Chemical Group and chairman of its Duc Giang-Lao Cai Chemical subsidiary, has been charged under three counts related to accounting violations (causing serious consequences), illegal resource exploitation, and environmental pollution.

Pham Van Hung, director of Duc Giang-Lao Cai Chemical, faces charges of accounting violations causing serious consequences and environmental pollution per Article 221 and Article 235 of the Penall Code.

Notably, Dao Huu Duy Anh, the chairman’s son, deputy chairman of the group and former CEO, along with several executives and accounting staff, has been charged with accounting violations causing serious consequences, as stipulated in Article 221 of the Penal Code.

Three other suspects, including mine and branch executives, have been charged with violations related to resource exploitation.

The investigation is ongoing, with authorities working to gather further evidence, expand the probe, and recover assets for the state.

From detergent maker to billion-dollar chemical group

Duc Giang Chemical Group traces its origins to a state-owned enterprise established in 1963. It was equitized in 2004, listed on the Hanoi Stock Exchange in 2014, and later moved to the Ho Chi Minh City Stock Exchange (HoSE) in 2020.

Under Huyen’s leadership, the company expanded from producing detergents and related materials into industrial chemicals, refined chemicals, fertilizers, and real estate.

Its charter capital has risen from VND15 billion ($570,630) at the time of equitization to nearly VND3.8 trillion ($144.45 million), with a market capitalization exceeding $1.2 billion.

According to data compiled by The Investor, Huyen and related parties hold more than 154.7 million shares, or about 40.74% of the company. Huyen himself owns nearly 69.8 million shares, equivalent to 18.38%, making him the largest shareholder.

His son, Dao Huu Duy Anh, holds more than 11.5 million shares, or 3.01%.

Following news of the arrests, DGC shares dropped 6.9% to VND68,800 ($2.62) per share, hitting a new low.