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“Unveiling” the mystery of Louis Holdings

April 15, 2022 06:20 GMT+7

With anonymous cash flow through authorized representatives, but Louis Holdings can still dominate other businesses publicly.

Louis Holdings continues to attract attention in this year’s AGM season when it plans to M&A Hoang Quan Real Estate Service Trading Consulting Joint Stock Company (HQC).

  Profit growth of Louis Capital, a subsidiary of Louis Holdings.

Profit growth of Louis Capital, a subsidiary of Louis Holdings.

Hide M&A cash flow numbers

Louis has ownership connections in many businesses, from core Louis Land (BII), Louis Capital (TTG) to Angimex (AGM), DAP – Vinachem (DDV), Vinh Khanh Plastic Cable (VKC), Sametel (SMT). ), Thu Duc House (TDH), Lam Dong Pharmaceutical (LDP) and recently HQC. It can be said that this is one of the typical examples of the phenomenon of rapid ecosystem expansion thanks to M&A. However, up to now, the cash flow that helps the Louis group reach out to other businesses has always been a mystery.

Earlier in 2021, Mr. Vo Ngoc Long, as the General Director and has a large ownership rate at Louis core, said that the business capital of Louis Holdings partly comes from other business activities from other members. members in the ecosystem, including cash flow from rice business.

VND 99.4 billion is Louis Capital’s net profit in 2021 (in 2020, this business has a net loss of VND 43.5 billion)

In addition, Louis Capital also increased capital through connection with investment funds, strategic investors, financial institutions to implement new projects, but the list of strategic partners was not disclosed.

Notably, although Louis Holdings does not own a large percentage, it still controls subsidiaries and puts people on the Board of Directors. Mr. Vo Ngoc Long said that this is because of the authorization of other shareholders in some companies. These authorizations can be personal, or phased. This way of “anonymous shareholder” is also part of the reason for the turmoil at Eximbank in recent years.

How to be fair and transparent?

A financial expert said that, in the case of non-disclosure, while anonymity is not illegal, it is not fair to other investors. In addition, anonymous investors do not publicly commit to long-term commitment to the company, affecting the stable operation of the business.

Vo Ngoc Long himself once explained about the anonymous group of shareholders: “For example, today they see that Louis Holdings is doing well, they authorize, but tomorrow when they see that we do not meet their wishes, they will cancel it. Therefore, when investors see companies announce that Louis Holdings controls certain companies, it is the contribution of authorized investors.”

Mr. Vo Ngoc Long also pledged that: “In the coming period, Louis Holdings will strive to buy back these investments to make this investment transparent with a dominant rate.” However, Mr. Vo Ngoc Long and Mr. Mr. Do Thanh Nhan is no longer in office, the leadership structure has changed at TTG.What has changed in the authorized investment capital at TTG to other businesses, is also a mystery.

“The maintenance of an anonymous authorization mechanism ensures that it does not violate the provisions on economic concentration restrictions in the Competition Law; Or even regulations on ownership of foreign investors (if there are foreign investors behind the group’s cash flow) in the enterprise…?”, an expert asked.

Recently, the stock market has witnessed a corporate leader being administratively fined for serving as a member of the Board of Directors of 7 companies (by law no more than 5 companies). So with anonymous cash flow through an authorized representative that governs the business openly but not completely transparently like in Louis Holdings, is there any mechanism for proper management?

According to DDDN

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