Hoa Binh Construction independent board member quits after dispute

Vietnamese building major Hoa Binh Construction (HBC) said Tuesday its board of directors has approved independent board member Nguyen Cong Phu’s resignation.

HBC chairman Le Viet Hai, also founder of the Ho Chi Minh City-based corporation, signed the decision of acceptance. The document says Phu’s resignation will be submitted to the company's next shareholder meeting for approval, and the chairman is authorized by the outgoing board member to join all meetings and voting until then.

Since January 1 this year, both Hai and Phu claimed to be the legal chairman of Hoa Binh, listed on the Ho Chi Minh Stock Exchange (HoSE) as HBC.

The reason is the founder quit his chairman position in December so that his son Le Viet Hieu could become CEO. On December 14, the board accepted Hai’s resignation, effective January 1, to be replaced by Phu, and Hieu was then named CEO.

However, Phu told the media that Hai had to step down as some board members had discovered some “financial wrongdoings” by him.

Therefore, Hai sought to convene an extraordinary board meeting in late December to discuss the possibilities for the board to delay his resignation.

According to HBC, the first virtual meeting on December 31 failed to gather enough members. The second one was held from 1:30 p.m. to 11:40 p.m. the same day with five out of eight members attending online. On January 1, both men claimed to be the legal chairman.

Later, the Vietnam International Arbitration Center ruled Hai remains the chairman. Based on this, the law enforcement force in HCMC issued a decision on January 19 recognizing Hai as the corporation’s chairman and legal representative.

Hoa Binh Construction Group is a leading construction contractor in Vietnam. The firm reported a net loss of over VND1.14 trillion ($48.34 million) in 2022, the first loss in its history, due to bad results in the fourth quarter.

Its net revenue last year reached VND14.122 trillion ($598.83 million), up 24% and fulfilling 80% of its target, according to the company's consolidated financial statement.

In Q4, Hoa Binh recorded net revenue of VND3,218 billion ($136.46 million), down 16% year-on-year. It suffered a gross loss of VND426 billion ($18.06 million) in the quarter, while posting a gross profit of over VND265.5 billion ($11.26 million) in the same period of 2021.