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Coteccons denies allegations by Kusto

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HCMC – Coteccons has rejected the recent allegations made in a press release by its major shareholder Singapore-based Kusto, which announced in the release that it will convene an extraordinary general meeting (EGM) on July 13 seeking to replace the board of Coteccons.

Construction company Coteccons on June 3 said that it had received information about the EGM and the false allegations against the board of directors from Kusto.

Kusto had earlier requested that an EGM be organized on October 15, 2019, to displace Nguyen Ba Duong and Nguyen Sy Cong as chairman and general director of Coteccons, respectively, but the board of directors rejected the request, said a representative of Coteccons.

Based on the same allegations, Kusto had repeatedly requested an EGM on April 23, the representative noted, adding that this time, Kusto issued a press release on June 2 and asked the Vietnam Securities Depository Center for the Coteccons shareholder list to organize an EGM on July 13.

Meanwhile, an annual general meeting is set to take place in late June, according to Coteccons.

The Coteccons side affirmed that the allegations made in Kusto’s press release about its unsuccessful attempts to dialogue with the Coteccons board of directors and resolve issues internally were baseless.

Such unfounded allegations have negatively affected the price of the Coteccons stock under the code CTD and its production activities, remarked Coteccons.

The conflict of interest mentioned in Kusto’s press release was related to Ricons Construction Investment JSC.

According to Kusto, Ricons, in addition to being Coteccons’ sub-contractor, is the firm’s opponent. The after-tax profit of Ricons was equivalent to 11% of that of Coteccons in 2015, but this figure surged to 51% in 2019. Some members of the Coteccons board of directors and management board hold similar positions at Ricons.

Responding to this, Coteccons said that with the scale of revenue amounting to some US$2 billion and securing several projects valued at up to VND7 trillion, Coteccons surely has thousands of subcontractors and suppliers.

“Ricons, Unicons or any other unit is only one of Coteccons’ subcontractors. The firm has detailed agreements with all of its subcontractors and suppliers. Aside from this, Coteccons has established the Expense and Contract Control Department to monitor contracts signed with partners, in line with the firm’s regulations,” noted Coteccons.

The representative of Coteccons also said that since late 2019, the firm has not signed any agreement with Ricons.

By Dung Nguyen

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