A large Vietnamese garment company was fined because 'the father is the chairman, the son is the general director'

TNG Investment and Trading Joint Stock Company has appointed a general director who is related to the business manager, who is also the chairman of the board of directors.

Mr. Nguyen Van Thoi - Chairman of TNG - Photo: TNG

Specifically, the Chief Inspector of the Department of Planning and Investment of Thai Nguyen province has just issued a decision to impose administrative penalties on TNG Investment and Trading Joint Stock Company (TNG).

The decision states that TNG Investment and Trading Joint Stock Company committed an administrative violation by appointing Mr. Nguyen Duc Manh as its general director, who has a family relationship with the company's manager, Mr. Nguyen Van Thoi, the chairman of the board of directors.

The Inspector of the Department of Planning and Investment of Thai Nguyen province affirmed that this appointment did not meet the conditions prescribed in Point b, Clause 5, Article 162 of the Law on Enterprises.

For the above violation, TNG must pay a fine of 25 million VND and at the same time be forced to remove Mr. Nguyen Duc Manh from the position of general director of the company. The time limit for implementing remedial measures is 10 days from the date of receiving the decision.

Mr. Nguyen Duc Manh - General Director of TNG

This decision was assigned to Mr. Nguyen Van Thoi, Chairman of the Board of Directors of TNG Investment and Trading Joint Stock Company, to represent the violating organization in complying with the decision.

"If TNG does not voluntarily comply within the specified timeframe, enforcement will be carried out according to regulations," the Inspectorate of the Department of Planning and Investment stated. Furthermore, the inspectorate also indicated that TNG has the right to appeal or file an administrative lawsuit against this penalty decision.

According to TNG's corporate governance report, Mr. Nguyen Duc Manh is the biological son of Mr. Nguyen Van Thoi. Mr. Thoi also has another son, Nguyen Manh Linh, who is a member of TNG's board of directors.

According to our research, point b, clause 5, Article 162 of the Enterprise Law stipulates: "For public companies, state-owned enterprises, and subsidiaries of state-owned enterprises, the director or general director must meet the following standards and conditions: They must not be related to the enterprise manager, the company's auditor, or the parent company; the representative of state capital, or the representative of the enterprise's capital in the company and the parent company."

According to an expert, a publicly traded company is no longer a business owned by a single individual. Therefore, the law stipulates quite strict regulations regarding transparency, information disclosure, and operational methods, as well as the establishment of personnel mechanisms to ensure the public nature of the business.

The above regulations restrict and eliminate practices that demonstrate "nepotism," ensuring democracy and that the legitimate rights of the majority of shareholders are exercised in accordance with the law and charter of public joint-stock companies.

Regarding TNG, it is a large textile and garment enterprise in Vietnam with annual revenue in the trillions of VND. For example, in 2023, TNG had revenue of over 7,000 billion VND.

Source: https://tuoitre.vn/mot-cong-ty-may-lon-cua-viet-nam-bi-phat-vi-bo-la-chu-tich-con-lam-tong-giam-doc-20250101110843162.htm