Scandal-hit LDG real estate projects in legal hot water
Projects run by the scandal-hit LDG Investment JSC have been found to show legal irregularities, with some built illegally and others remaining on paper despite being launched for sale a long time ago.
Illegal buildings
Once one of the most famous businesses in the real estate market, Ho Chi Minh City-based LDG and its chairman Nguyen Khanh Hung have left behind scandals surrounding projects the company invested in and developed.
Many of its projects have incomplete legal procedures and involve unresolved disputes, lawsuits, and complaints.
Noteworthy among those is the Tan Thinh Residential Area (Viva Park) project in Doi 61 commune, Trang Bom district, Dong Nai province which has been caught committing several violations including the construction of almost 500 properties without permission, non-payment of compensation to displaced residents, and sales of the illegally built properties.
The project has left LDG chairman Nguyen Khanh Hung in legal trouble. He was arrested on Thursday for "deceiving customers", an offence under Article 198 of the Penal Code.
Approved by the authorities in 2018, the VND1 trillion ($41.15 million) project, touted as a pioneering “smart” urban area, was said to have 488 villas and 290 townhouses, schools, supermarkets and medical facilities built on 18.22 hectares that were home to rubber plantations.
Also in 2018, LDG put the project up for sale through real estate trading floors at a price of about VND1.8 billion ($74,070) per townhouse and VND2.2 billion ($90,530) per villa.
However, in August 2020, the southern Vietnam real estate market was shocked by the news that LDG illegally built hundreds of townhouses and villas at the Viva Park project.
At that time, Viva Park had sold 70% of the properties for VND1.9 billion per townhouse and VND2.5 billion per villa. Site clearance had been completed, but only about 60% of technical infrastructure had been installed, while the construction of 488 houses, including 198 villas and 290 townhouses, had been completed. Meanwhile, 192 other townhouses were under construction.
Chairman of the Dong Nai provincial People's Committee Cao Tien Dung issued a decision imposing a fine of VND6.3 billion ($259,260) against LDG for administrative violations.
At the third annual general meeting of shareholders 2022 in late June 2022, LDG chairman Hung revealed that the progress of many projects in Dong Nai province, which borders Ho Chi Minh City, had stagnated due to inspections since 2020. Inspection results indicated that LDG had made administrative violations for construction orders, but showed no signs of criminal violations, he said.
In early April 2023, Dong Nai inspectors concluded that LDG had not been allocated the land, allowed to change land use purposes, or granted a construction permit. However, the enterprise had embarked on building 680 houses, with 488 completed and 192 under construction.
The project did not qualify for pre-sale, but LDG signed principle contracts to sell houses to 60 customers for more than VND132 billion ($5.43 million). Buyers paid the company 25-95% of their contract value and seven households have moved in.
Ineligible projects for sale
When talking about LDG, it is impossible not to mention its West Intela and High Intela projects in Ho Chi Minh City. In 2017-2018, the two projects were advertised and opened for sale by Nam Saigon Real Estate Development and Investment JSC, a subsidiary of LDG. The developer advertised the smart apartment projects with convenient locations and affordable prices, suitable for young people.
Believing Nam Saigon and LDG to be large and reputable investors, many people put money down to buy apartments. At that time, the investor committed to handing over the apartments in the third and fourth quarters of 2019, but the projects were still on paper. The company continued to make commitments but now dozens of customers do not have homes to live in and the projects remain in limbo.
Nam Saigon and LDG blamed the delays on objective reasons such as changes in government policies, slow procedures at competent state agencies, and overlapping legal regulations. Therefore, they refused their obligation to pay back deposits or interest to customers.
Meanwhile, inspectors from the HCMC Department of Construction confirmed that both projects were not eligible for sale as they failed to complete legal procedures. However, the investor had still offered them for sale, received deposits and signed sale-purchase contracts, collecting tens of billions of Vietnamese dong (VND10 billion = VND411,700) from buyers.
Dozens of customers who bought apartments in the two projects shared that Nam Saigon and LDG have left many families without a home and now they just want to get their money back to cover living costs.
LDG’s violations do not stop there. The LDG Sky project, with five 30-storey blocks, located in Binh An ward, Di An town, Binh Duong province, is also in trouble. This project has been up for sale since the end of 2020. In early 2022, a series of customers hung banners demanding their money back. They reported that the project had been offered for sale more than a year, but its legality remained in question.
After the LDG chairman was arrested, the share price of the company, listed on the Ho Chi Minh Stock Exchange as LDG, plummeted to its floor of VND3,450 ($0.14) on Friday.
- Read More
Work begins on Mitsubishi Estate’s $55 mln logistics facility in northern Vietnam
Logistics facility brand Logicross, under Japan’s Mitsubishi Estate, kicked off the construction of its Logicross Hai Phong ready-built warehouse in Vietnam’s northern city of Hai Phong on Tuesday.
Industrial real estate - Wed, November 20, 2024 | 10:58 am GMT+7
French logistics giant eyes to launch electric barges on inland waterways in Vietnam
CMA-CGM Group, a French shipping and logistics company, has plans to deploy electric barges, initially on inland waterways in Vietnam.
Companies - Wed, November 20, 2024 | 10:43 am GMT+7
2025 a turning point for Vietnam stock market: broker
Vietnam's stock market has struggled to capture the attention of both domestic and foreign investors in recent months, reflected by persistent foreign capital outflows and a steady decline in market liquidity, but next year will be a turning point for the market, says Chen Chia Ken, CEO of Phu Hung Securities JSC.
Finance - Wed, November 20, 2024 | 7:07 am GMT+7
Construction trio keen on building $1.5 bln expanded expressway in southern Vietnam
Three construction majors in Vietnam are interested in building an expanded expressway connecting Ho Chi Minh City with the Mekong Delta provinces of Long An and Tien Giang for an estimated VND38.6 trillion ($1.52 billion).
Infrastructure - Tue, November 19, 2024 | 8:18 pm GMT+7
Singapore, Germany upgrade relations to strategic partnership
Singapore and Germany have decided to elevate their ties to a Strategic Partnership to promote closer cooperation in areas of mutual interest such as security, artificial intelligence (AI) and clean energy.
Southeast Asia - Tue, November 19, 2024 | 8:01 pm GMT+7
Thailand’s rice shipment up 20% in 10 months
Thailand exported 8.37 million tons of rice in January-October, a year-on-year increase of 20%, according to the Ministry of Commerce.
Southeast Asia - Tue, November 19, 2024 | 8:00 pm GMT+7
Vietnam’s inconsistent legal framework poses problems for FDI sector: Deep C exec
Vietnam’s legal framework lacks consistency and the foreign direct investment (FDI) sector will soon face challenges related to the Law on Environmental Protection, says Bruno Jaspaert, CEO of Deep C Industrial Zones.
Economy - Tue, November 19, 2024 | 6:30 pm GMT+7
Vietnam shares sink on extended foreign selloffs
Vietnamese equities fell for a fourth consecutive day on Tuesday as foreign traders extended their selling spree.
Finance - Tue, November 19, 2024 | 5:10 pm GMT+7
Germany’s household product firm QuickPack to invest $32 mln in Vietnam
Germany’s QuickPack, a specialist for household goods and hygiene products, will invest €30 million ($31.8 million) in Vietnam’s Mekong Delta province of Long An.
Industries - Tue, November 19, 2024 | 4:24 pm GMT+7
Malaysian millionaire willing to invest in convicted Vietnamese tycoon’s property project: lawyers
Malaysian millionaire Vincent Tan has evinced investment interest in a residential project owned by convicted tycoon Truong My Lan, chairwoman of Van Thinh Phat Group, lawyers for the latter have disclosed.
Real Estate - Tue, November 19, 2024 | 4:17 pm GMT+7
‘Bottleneck of bottlenecks’ continues to dog Vietnam's property, infrastructure projects
Limited consultations between state agencies and the parliament’s primary focus on wording are issues with Vietnam’s legal framework adversely affecting property and infrastructure projects, say experts and corporate leaders.
Economy - Tue, November 19, 2024 | 3:40 pm GMT+7
President Xi Jinping hastens construction of 3 Vietnam-China rail routes
Chinese President Xi Jinping has called for more substantial cooperation between China and Vietnam, including the pacier implementation of three railway routes linking the two nations.
Infrastructure - Tue, November 19, 2024 | 3:08 pm GMT+7
Vietnam developers offer deferred principal payments, interest support to boost year-end sales
Vietnamese housing developers are offering several incentives including deferred principal payments and interest support to stimulate demand and boost liquidity as the year nears its end.
Real Estate - Tue, November 19, 2024 | 2:29 pm GMT+7
Australia's EQ Resources acquires TMG Group with Vietnam-based ferrotungsten factory
Australia-based EQ Resources Limited has acquired its fellow firm Tungsten Metals Group (TMG), which owns and operates the largest ferrotungsten (FeW) factory outside China.
Companies - Tue, November 19, 2024 | 11:00 am GMT+7
Techcom Securities becomes largest broker in Vietnam by capital base
Techcom Securities JSC (TCBS) has become the largest securities company in Vietnam by charter capital after finishing a rights offering last week.
Finance - Tue, November 19, 2024 | 9:11 am GMT+7
Vietnam airport operator ACV looks to better exploit non-aviation service potential: exec
Vietnam's airports operator ACV expects to earn $145 million from non-aviation services this year, accounting for around 18.83% of its total revenue, which is modest compared to other countries, said deputy general director Nguyen Duc Hung.
Companies - Tue, November 19, 2024 | 7:45 am GMT+7