Shareholder sues leading construction firm Hoa Binh

A shareholder has filed a petition to the Vietnam International Arbitration Center (VIAC) against Hoa Binh Construction Group (HBC) amid the increasingly tense power struggle occurring at the Vietnamese construction contractor.

The arbitration center announced that on January 3, it had received a petition from Huynh Bao Ngoc, asking for the annulment of three resolutions previously adopted by the group’s board of directors.

Resolution No. 50, dated December 14, 2022, approved Le Viet Hai's resignation from the positions of board chairman and member from January 1, 2023. The resolution also approved 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.

VIAC said it would conduct arbitral proceedings in accordance with the law on commercial arbitration and its arbitration rules.

A “war of power” among Hoa Binh's board members related to the position of chairman has made headlines in recent days.

Earlier, on December 14, 2022, Hoa Binh 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.

Hoa Binh 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 (Tet).

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.

The release said that with the intention of canceling the decisions made at the board’s meeting on December 14, 2022, Hai repeatedly convened the board’s virtual meetings on December 29 and 31 but failed.

This group said that they had sent a written notice to Hai to refuse his meetings as they were not in accordance with the group's regulations. Therefore, any decisions adopted are invalid, they noted.

Meanwhile, Hai affirmed that his return to the position of HBC chairman was completely in line with the law.

On Thursday, Phu and Hung held a press briefing providing internal information about the group’s business situation at a cafe on Pasteur street, District 1, Ho Chi Minh City.

"On January 10, we will have a meeting to clarify why there was such an unusual Resolution 53. If we can come to an agreement, we and many shareholders will sue the company for its violations in recent years," Hung said.

In response, Hoa Binh announced on its website that there had been no press briefing held by the group. "The above activity was done after these members could not hold the press briefing as announced, as they failed to prepare all legal conditions needed for the event to be licensed by competent authorities," the group said.

On the same day, Hoa Binh Construction Group and Le Viet Hai said that they would send a denunciation to the investigative agency on Friday, requesting consideration of the criminal liability of Nguyen Cong Phu and Duong Van Hung and other individuals who have given them a helping hand.

In its announcement, Hoa Binh stressed that all information, contents, documents and statements made by its legal representative, Le Viet Hai, and his authorized person - standing deputy CEO Le Viet Hieu are valid.