Fat Group struggles to repay bond debt.

Two tranches of bonds remain unpaid.

On May 9, 2025, the State Securities Commission issued a decision imposing administrative penalties in the field of securities and securities market on Dua Fat Group Joint Stock Company (code DFF).

Among the numerous violations identified, this company was penalized for publishing false information related to bonds.

Accordingly, the Company is adding 720,000 DFF shares as collateral as committed in the Bondholders' Resolution dated June 13, 2022. However, in the Report on the implementation of commitments to bondholders for the semi-annual period of 2024 (No. 230829.04/CV-DF dated August 29, 2024), 2023 (No. 240330.04/CV-DF dated March 30, 2024), the semi-annual period of 2023 (No. 230829.04/CV-DF dated August 29, 2023) and 2022 (No. 230330.04/CV-DF dated March 31, 2023) submitted to HNX, the Company announced that it had fulfilled its commitments regarding collateral for bonds coded DFFH2123001.

The HNX system recorded that Dua Fat issued two bond tranches in 2021. The DFFH2123001 bond tranche, valued at VND 150 billion, was issued in September 2021 with an 18-month term, maturing in March 2023. The DFFH2124002 bond tranche, valued at VND 300 billion, was issued in December 2021 with a 36-month term, maturing in December 2024.

Dua Fat had previously encountered numerous problems related to these two bond issues and was unable to repay the principal and interest on time. In early 2024, the Group announced that the holder of bond DFFH2123001 had allowed Dua Fat to make the remaining overdue principal and interest payments without going through a payment agent.

The company's announcement regarding the payment of principal and interest on its bonds indicates that, as of the scheduled payment date of December 31, 2024, the company has not yet paid the remaining principal of over 51 billion VND for bond lot DFFH2123001 and 300 billion VND in principal and over 51.2 billion VND in interest for bond lot DFFH2124002.

According to Dua Fat, the reason for the delayed payment is due to the difficulties and disadvantages facing the economy in general and the construction industry in particular. The company has a small number of projects, and investors are not paying on time, leading to financial difficulties in arranging to pay off debts when due. The company is still negotiating with bondholders to request an extension for principal and interest payments on the bonds.

Based on Dua Fat's most recent financial report, the Q1/2025 financial report, these two bond loans are still being recorded, indicating that even though the original maturity period has passed, Dua Fat has not yet repaid the bond debt.

Accordingly, the company still has outstanding short-term bond debt of VND 341 billion, including VND 41 billion with Bao Viet Securities Joint Stock Company and VND 300 billion with Bao Viet Bank.

The DFFH2124002 bond issue, worth 150 billion VND, currently has 41 billion VND outstanding. Dua Fat has pledged 15 million shares as collateral. The 300 billion VND bond issue, issued to Bao Viet Bank for investment in the construction of Ninh Binh Port and the purchase of machinery and equipment for the company's production and business operations, uses asset mortgage contracts, barge construction contracts between DFF and 189 One-Member Limited Liability Company; sales contracts between Dua Fat and TCE Equipment and Services Joint Stock Company; construction pontoon sales contracts between Dua Fat and Vietnam Investment Construction and Project Management Joint Stock Company; and economic contracts between Dua Fat and TMD Import-Export Limited Liability Company as collateral for this bond issue.

In the first quarter of 2025, Dua Fat continued to incur losses. Net revenue in the first quarter reached VND 74.4 billion, a 55% increase compared to the same period last year. However, this revenue was significantly lower than the cost of goods sold (VND 135 billion), resulting in a gross loss. Net profit after tax was -VND 116.9 billion, a much heavier loss than the same period in 2024 (Q1 2024 loss of VND 21.2 billion). This marks Dua Fat's seventh consecutive quarter of losses.

Previously, in 2024, Dua Fat incurred a loss of 462.5 billion VND, a record loss to date. As of the end of the first quarter, the company had accumulated losses of 680 billion VND.

Involved in numerous violations in the securities sector.

The recent disciplinary decision by the State Securities Commission points to a series of violations by Dua Fat in the securities sector.

Accordingly, the company was fined 92.5 million VND for failing to disclose information that was required to be disclosed by law, as stipulated in point a, clause 4, Article 42 of Decree No. 156/2020/ND-CP.

The company did not disclose the following documents on the information disclosure system of the State Securities Commission, the website of the Hanoi Stock Exchange (HNX), and the company's website: Board of Directors' resolution approving the 2022-2023 business plan and the loan plan from Agribank ; Board of Directors' resolution approving the loan to Vinh Hoa Co., Ltd. - a subsidiary; Board of Directors' resolutions approving transactions with related parties; and information disclosure prior to the early repurchase of bonds code DFFH2123001 on November 25, 2022.

The company failed to disclose information on time regarding a series of documents: Explanations related to the Q1/2024 Financial Report (Business results showing a loss), audited financial statements for 2022 and consolidated financial statements for 2022; Annual report for 2022; audited separate and consolidated financial statements for 2022; Certificate of change in business registration dated July 11, 2024; Company charter approved by the Annual General Meeting of Shareholders on June 9, 2023 and June 25, 2024; Semi-annual 2024 Commitment Implementation Report: Semi-annual 2024 audited use of proceeds from bond issuance; Semi-annual 2024 principal and interest payment status…

In addition, the company was fined 65 million VND for publishing incomplete information as required by law, as stipulated in point b, clause 3, Article 42 of Decree No. 156/2020/ND-CP.

Accordingly, Dua Fat did not fully present the content as prescribed in Appendix V on the Corporate Governance Report form issued with Circular No. 96/2020/TT-BTC dated November 16, 2020, of the Minister of Finance guiding the disclosure of information on the securities market.

Specifically: The summary of each Board of Directors' Resolution is not fully presented in Section 5, Part II of the Corporate Governance Report for 2022, the first six months of 2023, 2023, and the first six months of 2024; the 2022 Corporate Governance Report does not mention Board of Directors' Decision No. 21.3/2022/QD-HĐQT/DFF dated March 21, 2022, on the approval of the company's charter and Board of Directors' Resolution No. 220830/2022/NQ-HĐQT dated August 30, 2022, on the transfer of land use rights, ownership of houses and other assets attached to the land; The company has not presented the advance and reimbursement transactions with insider (Ms. Nguyen Thi Thuy Linh - Member of the Board of Directors) in Section 2, Part VII of the Corporate Governance Report for the first six months of 2023, and the transactions with Ms. Tran Thi Hong Nhung - a related party of Mr. Le Duy Hung (Chairman of the Board of Directors) in Section 2, Part VII of the Corporate Governance Report for the first six months of 2024.

Simultaneously, due to the act of disseminating false information, Dua Fat was fined 175 million VND. Besides the aforementioned failure to provide sufficient collateral for the bonds, the company also misrepresented the Net Profit after Corporate Income Tax figures for 2021, 2022, 2023, and the first six months of 2024 in its separate and consolidated financial statements for the fourth quarter of 2021, 2022, 2023, and the first half of 2024, compared to the audited financial statements for 2021, 2022, and 2023, and the reviewed financial statements for the first six months of 2024.

In Section 2, Part II of the Corporate Governance Report for 2022 and 2023, the Company stated the number of Board of Directors meetings for the years as 25 and 11 respectively. However, according to the documents provided by the Company, the total number of Board of Directors meetings in 2022 was 26 and in 2023 was 12.

Due to the dissemination of false information, Dua Fat is required to cancel or correct the information regarding the act of disseminating false information, as stipulated in Clause 6, Article 42 of Decree No. 156/2020/ND-CP, amended and supplemented by Point d, Clause 33, Article 1 of Decree No. 128/2021/ND-CP.

In addition, the company was fined an extra VND 137.5 million for violating regulations on transactions with shareholders, business managers, and related parties of these individuals, as stipulated in point c, clause 6, Article 15 of Decree No. 156/2020/ND-CP, amended and supplemented by clause 13, Article 1 of Decree No. 128/2021/ND-CP.

Specifically, the company provided loans to Vinh Hoa Limited Company (an organization related to Mr. Le Van Thinh - a shareholder of the company) and Le Gia Logistics Joint Stock Company (an organization related to Mr. Hoang Hiep - a shareholder of the company).

The total amount of fines imposed on DFF for the aforementioned violations is 470 million VND.

Source: https://baodautu.vn/tap-doan-dua-fat-chat-vat-tra-no-trai-phieu-d283697.html