VietNamNet Bridge – Following a series of state owned
conglomerates and general corporations, Quoc Cuong Gia Lai Group has become the
“aiming point” of the public, after a lot of problems of the real estate giant
were discovered.
Thirteen out of the 15 big
projects expected to bring money to Quoc Cuong Gia Lai in 2011-2013 are medium
and high end real estate projects. Meanwhile, the sector proves to be the
biggest sufferer in the economic downturn.
Quoc Cuong Gia Lai group has been
well known to everyone as a big guy in the real estate sector. However, the
information about the group reaching out to the public mostly relates to
scandals, rather than the group’s business performance.
Nguyen Quoc Cuong, Deputy General
Director of Quoc Cuong Gia Lai, deserves credit for making the company famous
to everybody. However, the information about Cuong relates mostly to his luxury
car collection or beauties.
Cuong is also the spokesman of
the group, but he very rarely turns up before the press to talk about the
company’s business activities. The person who comes forward and answers the
questions raised from the public has always been Nguyen Thi Nhu Loan, Chair of
the Board of Directors and CEO of Quoc Cuong Gia Lai, who is the mother of
Cuong.
Just some months after the
company entered the bourse in late 2010, Quoc Cuong Gia Lai surprised investors
with the move to raise the chartered capital by two folds. The company issued
shares to existing shareholders and workers at preferential prices, while
workers were told not to transfer shares within one year since the issuance
day.
The six-month profit of the
company soared surprisingly by four times. However, the workers of Quoc Cuong
Gia Lai refused to buy the 40 percent of shares specifically issued to the
company’s staff.
A series of scandals relating to
Quoc Cuong Gia Lai have occurred recently, including the disputes with the
clients who buy products at the Quoc Cuong Gia Lai 1 apartment bloc in HCM
City, at the Trung Nghia residential quarter in Da Nang City. The public was
also stirred up by the information that Quoc Cuong Gia Lai’s clients were told
to remit money into two accounts – the company’s account and the director’s
account – for making payment for the apartments they bought.
Quoc Cuong Gia Lai also caught
the special attention of the public in early June 2012 with the information
that Nguyen Thi Nhu Loan offered gifts – hundreds of thousands of shares - to
some individuals, despite the reported big loss of the group.
After it successfully mobilized 1
trillion dong from the share issuance in 2010, Quoc Cuong Gia Lai could also
find hundreds of billions of dong by issuing corporate bonds. The capital has
been injected in real estate projects, which means that Quoc Cuong Gia Lai has
“put all the eggs it has into one basket,” instead of putting capital into
different business fields to disperse risks.
The noteworthy thing is that the
real estate market began showing its problem in 2010 already, but Quoc Cuong
Gia Lai still put a high expectation on the market.
Quoc Cuong Gia Lai has registered
business in many different fields including wood trade, hydropower, rubber and
real estate. However, 90 percent of the income of the group was brought by the
real estate trade in 2010.
Most recently, investors have got
started at the information that the company has borrowed money from its
shareholders with the total sum reaching 150 billion dong. Meanwhile, the
company also lent the shareholders 100 billion dong. Quoc Cuong Gia Lai, for
example, borrowed 1 billion dong from Lau Duc Duy – a shareholder, while it
lent 33.5 billion dong to Duy.
Nguyen Tri Hieu, a banking
expert, has affirmed that such a big company would surely “have problems” if it
has to borrow money from individuals.
Compiled by C. V
Business & Investment Opportunities
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