FLC Group apologizes for being delisted over information disclosure violations

FLC Group on Friday apologized to shareholders for being delisted and affirmed shareholders' interests would still be guaranteed as the firm is trying to put FLC shares on the unlisted public company market UPCoM.

"We understand that the delisting of FLC shares is an unacceptable thing for shareholders. FLC's boards of directors and management would like to send our most sincere apologies to our shareholders," FLC's general director Bui Hai Huyen wrote in a letter to shareholders.

Huyen said that even though the shares were delisted from the Ho Chi Minh Stock Exchange (HoSE), shareholders' interests would still definitely be guaranteed under the provisions of the Law on Enterprises and the company's charter. "In all cases, shareholders have full ownership and disposal rights of FLC shares."

In addition, FLC shareholders still retain all rights to participate in the general meeting of shareholders; the rights to vote, nominate and stand for election to the board of directors in accordance with the law and the company's charter, she said.

"FLC Group will announce the first trading day of FLC shares on the UPCoM as soon as the Hanoi Stock Exchange (HNX) issues the decision approving the trading registration," Huyen added.

On February 14, the HoSE issued a decision to delist nearly 710 million of FLC shares from February 20 for the company’s serious violations of information disclosure obligations. FLC Group on February 15 sent a petition to authorities asking for reconsidering their decision.

FLC said that, in recent times, the group and its member units had to face many risks and difficulties due to the impact of information and issues arising from the detention of its former leaders. For a long time, the company could not find an auditing company that agrees to audit its financial statements.

On September 20, 2022, the group signed an audit service contract with UHY Auditing and Consulting Co., Ltd. UHY would thus become the audit service provider for FLC's 2021 financial statements. However, "due to many objective reasons", up to now, FLC has not received any audit results from UHY.

Previously, on March 29, FLC's former chairman Trinh Van Quyet was arrested on charges of "manipulating" and "concealing information in securities activities".

Before Quyet was arrested, FLC Group had been known as one of Vietnam's leading property developers with many projects or investment proposals across the country.

Nguyen The Minh, chief of analysis at Yuanta Securities, told The Investor that shareholders would suffer great losses due to FLC shares being delisted. Previously, FLC was a preferred stock for surfing due to high liquidity, but the sudden drop in the stock caused many investors to be "locked in". In addition, FLC also issued bonds, so those who had FLC shares as mortgages would be affected.

"FLC is likely to move to the UPCoM, but here the liquidity of this stock will be impacted, and investors will not be able to use margin when investing in this stock. The best solution is to let the business improve its core issues before re-trading," Minh said.

He also noted that the market might not be affected much by the news of FLC being delisted because this code has been suspended from trading since September 2022.