HCMC – The Government Inspectorate has uncovered a number of shortcomings, deficiencies and violations in the issuance of corporate bonds via private placement.
The Government Inspectorate has issued Document No. 392 announcing the inspection conclusions regarding compliance with laws and regulations on the issuance of corporate bonds through private placement and the use of proceeds from such bond sales.
The Government Inspectorate conducted inspections of 26 bond issuing organizations. Of these, the real estate sector accounted for 10 issuers with 88 bond lots totaling more than VND52.57 trillion, including DCT Partners Vietnam Co., Ltd.; Development Investment Construction Joint Stock Company; Binh Tan Trade Investment Joint Stock Company; Khang Dien House Trading and Investment Joint Stock Company; R&H Group; Nam Long Investment Corporation; Hung Thinh Land Corporation; Hung Thinh Investment Corporation; Continent Foreign Trade and Investment Development Land Joint Stock Company; and Hoi An Invest JSC.
In the energy sector, three issuers floated five bond lots worth more than VND3.83 trillion, including PC1 Group JSC; VCP Construction and Energy JSC; and Bac Phuong Energy JSC.
The trade and services sector comprised six issuers with 70 bond lots totaling over VND20.31 trillion, including Agricultural Materials Import-Export III JSC; General Green World Joint Stock Company; TNH Hotels & Resorts Management and Investment Joint Stock Company; Nam Rach Chiec Co., Ltd.; Hung Thinh Quy Nhon Service Entertainment Joint Stock Company; and Thanh Thanh Cong Investment JSC.
In securities brokerage, two issuers floated 53 bond lots worth more than VND18.38 trillion, namely Viet Dragon Securities Corporation and Tien Phong Securities Corporation. In manufacturing and business, two issuers offered 31 bond lots totaling over VND13.1 trillion, including Gelex Group JSC and Thanh Thanh Cong-Bien Hoa JSC.
During the inspection period, six issuers fully repaid bonds totaling more than VND9.71 trillion, while 17 issuers settled certain bond lots and conducted early buybacks of part or all of their bonds with a combined value of over VND52.86 trillion.
As of November 30, 2024, 20 issuers still had 119 bond lots outstanding with a total value of VND57.21 trillion. Of these, three issuers had overdue principal and interest payments totaling more than VND10.63 trillion.
Based on documents and reports provided by the 26 issuers operating across various sectors—including real estate, energy, securities trading, trade and services, manufacturing and others—as well as relevant agencies and units, the inspections found a number of shortcomings, limitations, deficiencies and violations.
Specifically, certain bond offerings failed to meet required conditions. Five issuers did not fully satisfy statutory conditions when issuing bonds.
There were 17 issuers failing to disclose complete information as required by law. Missing details included specific purposes of issuance, disbursement timelines for bond proceeds, expected issuance dates, and incomplete information on collateral.
Three issuers— TNH Hotels & Resorts Management and Investment Joint Stock Company; Hung Thinh Land Corporation; and Viet Dragon Securities Corporation—were found to have disclosed pre-offering information beyond the statutory deadline.
Government inspectors also concluded that three issuers failed to register or deposit bonds, or did so beyond the prescribed deadline. Four issuers repurchased bonds prior to maturity without having an approved buyback plan as required by law, including Hung Thinh Investment Corporation; Vietnam Sturgeon Joint Stock Company; Continent Foreign Trade and Investment Development Land Joint Stock Company; and Viet Dragon Securities Corporation.
The inspection found that most issuers committed violations or shortcomings related to information disclosure. These included failure to disclose information; failure to publish semi-annual and annual financial statements; failure to report on the use of bond proceeds; failure to report on principal and interest payments; and failure to report on compliance with commitments to bondholders.
According to the inspectorate, three issuers—Vietnam Sturgeon; Viet Dragon Securities; and I.P.A Investment Group—provided incomplete information disclosures. Some issuers also reported on the use of bond proceeds in a manner that was incomplete or inconsistent with actual conditions upon inspection.
Delays in information disclosure were widespread. The inspections found that five issuers were late in disclosing bond offering results, as well as extraordinary disclosures regarding delayed principal and interest payments, amendments to bond tenors, and changes to bond terms and conditions.
Based on the inspection findings and conclusions, the inspectorate recommended that the prime minister assign the Ministry of Finance to direct the State Securities Commission of Vietnam to review and handle violations by the issuers and related advisory units in accordance with the law.
At the same time, it called for strengthened inspection, review and enforcement against issuers and advisory units in relation to private corporate bond issuance, the use of bond proceeds, and statutory information disclosure obligations.
The inspectorate also provided information on violations and shortcomings of three companies—Hung Thinh Land Corporation; Hung Thinh Investment Corporation; and Hung Thinh Quy Nhon Service Entertainment Joint Stock Company—to the Ministry of Public Security for consideration and handling in accordance with its authority.
