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Coteccons accuses its largest shareholder Kusto of acquisition attempt

Luu Van Dat Wednesday | 06/03/2020 15:09

Coteccons is one of the few businesses that always pay high cash dividends at 30% -50%. Photo: Coteccons

Vietnam’s largest public construction firm accuses its Singapore-based shareholder Kustocem Pte. of attempting to complete the acquisition of the company by initiating the process to organize an Extraordinary General Shareholders’ Meeting.

The shareholder which holds a total 32.9% stake at the construction firm is initiating an extraordinary general shareholders’ meetings on July 13 when shareholders would vote to remove Chairman Nguyen Ba Duong and CEO Nguyen Sy Cong.

In a statement to media, Coteccons said that Kusto’s accusations were groundless. Kusto Group complained that senior directors and managers are now “in the conflicts of interest situation that create existential risks on Coteccons’ business and long-term sustainability, damaging to their investment through a reduction in Coteccons share prices.

“Kusto's groundless arguments have been causing negative impacts to other shareholders, seriously affecting the price of CTD shares as well as production and business activities of the company,” Coteccons said in the statement.

Last year, Kusto Group also initiated an extraordinary general meeting of shareholders on October 15, with the main purpose was to remove Chairman Nguyen Ba Duong and CEO Nguyen Sy Cong, Coteccons said, adding the goal was to complete the acquisition of Coteccons.

The Board of Directors rejected the request.

Photo: Coteccons
Photo: Coteccons

Coteccons said that the company is audited by famous companies including PwC, KPMG, EY, Deloitte. In addition, the Coteccons Board of Directors is operated transparently under the close monitor of shareholders.

Besides the difficulty of the local real estate market, the construction firm was also hit by the Covid-19 pandemic. Coteccons, which is still the leading enterprise in the construction industry, is one of the few businesses that always pay high cash dividends at 30% -50%, the company’s statement said.

The company that employs more than 30,000 workers in Vietnam has called government authorities to take necessary actions to protect the Coteccons brand, Vietnamese brand as well as the rights of all shareholders.

Activist investing campaigns are relatively rare in Vietnam, where foreign ownership caps on some public companies can stop overseas investors from exerting full control, Bloomberg commented.

► Coteccons Under Push for Extraordinary General Shareholders’ Meeting

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