The Ho Chi Minh City Department of Civil Judgment Enforcement has issued a decision forcing Hoa Binh Construction Group (HBC), a leading Vietnamese construction contractor, to cease enforcing three resolutions that caused an internal conflict among its board members.
The resolutions, previously adopted by the group’s board, include Resolution No. 50, dated December 14, 2022, approving Le Viet Hai's resignation from the positions of board chairman and member from January 1, 2023; and the establishment of the group’s founding council with Hai as chairman.
Resolution No. 51, also dated December 14, executed the appointment of Nguyen Cong Phu as chairman. Meanwhile, Resolution No. 53, dated December 31, featured the postponement of the two above-mentioned resolutions.
HBC said on Thursday it would comply with the authority's decision in line with the law.
Under the decision, Le Viet Hai will continue to serve as board chairman and legal representative of Hoa Binh Construction Group until the case is resolved by a valid decision or verdict of the arbitral tribunal under the Vietnam International Arbitration Center (VIAC).
Earlier, on January 3, VIAC announced that it had received a petition and attached documents from board member Huynh Bao Ngoc, asking for the annulment of the above three resolutions.
The center said it would conduct arbitral proceedings in accordance with the law on commercial arbitration and its arbitration rules.
The “war of power” is taking place among HBC’s board members related to the position of chairman.
On December 14, 2022, HBC announced the approval of Hai's resignation from the positions of board chairman and member, and his assumption of the role as the founding council’s chairman from January 1, 2023. Nguyen Cong Phu, an independent member of the board, was also approved to be chairman from the same day.
However, on December 31, 2022, the company board announced Resolution No. 53 postponing the approval of Hai's resignation. At the same time, it said the firm had not yet appointed Nguyen Cong Phu as chairman, replacing Hai, and had not appointed Hai’s son Le Viet Hieu as CEO.
In addition, it also postponed the establishment of the founding council, with Hai expected to be chairman. HBC argued that the postponement aimed to strengthen the legal foundations and firmly establish a new governance model in the implementation of the above decisions. It also claimed it wanted to ensure the company's smooth operation in the run-up to the Lunar New Year holiday.
On January 1, 2023, four members of the company’s board, namely Nguyen Cong Phu, Le Quoc Duy, Duong Van Hung and Albert Antoine, suddenly issued a press release refuting the above contents and requesting Hai not to take any actions that could hinder the succession of Phu.
Meanwhile, Hai affirmed that his return to the position of HBC chairman was completely in line with the law.
He stressed that all information, contents, documents and statements made by the firm’s legal representative, Le Viet Hai, and his authorized person - standing deputy CEO Le Viet Hieu are valid.
As the founder and a major shareholder that holds a 17.14% stake in the Ho Chi Minh City-listed HBC, Hai recently requested an extraordinary shareholder meeting be convened to dismiss a number of board members.
The meeting is expected to elect replacement board members and change a number of provisions in the company's charter. It also aims to correct and clarify "falsified" information regarding the company's financial health that Phu’s team released.