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FLC shares at risk of being delisted?

The Ho Chi Minh City Stock Exchange (HoSE) has decided to bring shares of FLC Group (FLC), FLC Faros Construction JSC (ROS) and HAI Agriculture and Pharmaceutical JSC (HAI) from “control” to “control” status. transaction restriction” from June 1.

HoSE said that all three listed companies were late to submit their audited financial statements for 2021 more than 45 days after the prescribed deadline.

In the subsequent explanation, FLC and ROS said that the enterprise had not found a suitable auditor, so it could not submit and publish the audited financial statements for 2021 in accordance with regulations.

In addition, ROS has not completed the procedure to change the legal representative because it has not received a response from the Investigation Police Agency – the Ministry of Public Security and the Business Registration Office – the Department of Planning and Investment of Ho Chi Minh City. Hanoi.

For its part, in April 2022, HAI explained that in the process of preparing financial statements for 2021, there were a number of items arising in the production and business process due to the impact of COVID-19 leading to the company needs more time to ensure compliance with the provisions of the law.

In addition, the audit unit and financial accounting personnel of the company were infected with COVID-19 during the reporting period, affecting health problems and had to adjust other personnel to replace them, leading to the new work. complete the financial statements for the year 2021 (separate and consolidated) together with the interrupted auditor.

Risk of delisting?

Point h, Clause 1, Article 120 of Decree 155/2020 stipulates that public company shares will be delisted if the audit organization does not accept to conduct the audit or has a contrary audit opinion or refuses to give such an opinion. Opinion on the latest annual financial statements of a listed organization or an exception to the annual financial statements for 3 consecutive years.

In the case of FLC and ROS, if an auditing organization that accepts to perform the audit cannot be found, the risk of mandatory delisting is present.

According to the provisions of Clause 2 of this Article, the shares are delisted but still satisfy the condition that the public company must register for trading on the UpCOM system.

Not only being restricted from trading, FLC was also repeatedly sanctioned for violating its information disclosure obligations. Most recently, on May 18, the State Securities Commission fined FLC 100 million dong for not disclosing information on the system of the State Securities Commission and HoSE’s website, the audited and audited 2021 financial statements and documents on the HoSE website. Annual report 2021.

Previously, at the end of March 2022, this group was also fined a total of VND 495 million by the State Securities Commission for the following acts: disclosing false information, disclosing incomplete information, failing to ensure the structure of members of the Board of Directors. independence.

Also according to point O, Clause 1, Article 120 of Decree 155/2020/ND-CP, an enterprise will be delisted when there is a serious breach of the obligation to disclose information and the cases are approved by the Stock Exchange or The SSC considers it necessary to delist to protect the interests of investors.

In the event that the listing is likely to be delisted, the Stock Exchange will notify the company and disclose information to the market, and at the same time may request the company to report and explain in detail the situation. cause if necessary.

In case the company is forced to delist, the Stock Exchange may consider allowing the securities to continue trading within a maximum period of 30 days from the date of issuance of the decision to delist.

Talking to, Lawyer Truong Thanh Duc commented that: “There is an existing risk of delisting, but there will be different delays depending on the case. During the evaluation process, agencies The management will give the business the opportunity to explain and evaluate the information, and at the same time have to take reasonable remedial measures. If not, the delisting is natural.”

Explaining more about the prospect of FLC stocks being delisted, Mr. Duc said: “The impact of the delisting will not be large because this group has continuously created a bottom in the past time. Before the latest developments. Investors have also identified risks and calculated for the above scenario.

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