Shares of Duc Giang Chemical Group (DGC) experienced their most volatile period in the past year, falling for 6 consecutive sessions, with 4 hitting the floor. The stock closed the week at 55,500 dong, losing approximately 25% since the arrest of chairman Dao Huu Huyen and his son, far exceeding the VN-Index's 3% decline for the week.
DGC faced intense selling pressure, resulting in millions to over 10 million shares remaining unsold at the floor price during each session that hit the limit. Both domestic and foreign investors engaged in heavy net selling, totaling over 380 billion dong. During the final session of the week, active buy orders absorbed almost all shares offered at the floor price. Consequently, liquidity surged to nearly 2,000 billion dong, the highest since the beginning of the year.
Beyond the impact of top-tier personnel news, DGC also felt the effects of tightened margin lending from several securities firms. Immediately after the company disclosed unusual information, Phu Hung Securities and Mirae Asset (Vietnam) Securities both removed the stock from their list of marginable securities. This contributed to increased short-term selling pressure, particularly for investors using financial leverage.
Earlier this week, the Ministry of Public Security announced that its Police Investigation Department for Corruption, Economic, and Smuggling Crimes temporarily detained Dao Huu Huyen, chairman of the Board of Directors, to investigate three charges. Dao Huu Duy Anh, vice chairman of the Board of Directors and son of Huyen, was also arrested on charges of violating accounting regulations, causing serious consequences. Several other members of the Board of Directors and the executive board were also prosecuted and temporarily detained.
Duc Giang Chemical Group currently has two Board of Directors members remaining: Luu Bach Dat, who also serves as general director, and Nguyen Thi Thu Ha. This number is below the legal minimum of three members. The company recently announced an extraordinary general shareholders' meeting in May to elect additional members. It also appointed a new chief accountant to replace the arrested predecessor.
Duc Giang Chemical Group was established in 1963, originally a state-owned enterprise under the General Department of Chemicals. It is listed on the TP HCM Stock Exchange and is a component stock of the large-cap VN30 index.
Revenue peaked at nearly 15,000 billion dong and after-tax profit exceeded 6,000 billion dong in 2022. According to unaudited figures, last year, the company generated 11,260 billion dong in revenue and approximately 3,188 billion dong in profit.
Phuong Dong
