The State Securities Commission fined UDC VND 92.5 million for failing to disclose information in accordance with the law. The corporation did not publicly disclose the signing of the 2023 financial statement audit contract.

In addition, the company also failed to disclose other required documents in a timely manner, including the 2023 reviewed semi-annual financial statements, the statement signed by Vice General Director Mai Ngoc Dinh on November 20, 2023, the 2023 audited financial statements, the 2023 annual report, the explanation of the auditor's qualified opinion on the 2023 financial statements, and explanations for discrepancies in after-tax profit in the 2023 financial statements before and after the audit, as well as the explanation for the post-audit losses.

Regarding business operations, according to the newly published and reviewed semi-annual financial statements for 2024, UDC earned over VND 90.3 billion in net revenue in the first half of the year, a significant increase of more than 169% year-on-year. However, the cost of goods sold also increased sharply, while financial revenue decreased from more than VND 573 billion in the same period to just over VND 41 billion. Financial expenses increased by over VND 2 billion compared to the same period, and other costs surged from VND 684 million in the same period to nearly VND 5.4 billion. All these factors resulted in a post-tax loss of more than VND 29.4 billion for this real estate company in the first half of 2024.

Besides the business losses, UDC also received a qualified opinion from the auditors, along with doubts about the company’s ability to continue as a going concern. Specifically, according to the auditors, as of June 30, 2024, unfinished production and business costs pending settlement or temporarily suspended amounted to VND 66.7 billion, while outstanding receivables stood at VND 14.4 billion, which the company has yet to assess for recoverability. The auditors were unable to obtain sufficient documents to evaluate the net realizable value of these items.

In addition, the company has recorded liabilities of VND 39.5 billion to the Enterprise Arrangement and Development Support Fund and VND 25.7 billion in dividends payable to the state capital. Interest overdue related to these payables has not been recorded because the company is awaiting guidance from the relevant authorities.

“We have completed all procedures in accordance with Vietnamese standards, but we could not gather all the necessary information to assess the impact of the aforementioned issues on the accompanying interim consolidated financial statements,” emphasized the auditing unit.

The auditors also highlighted that as of June 30, 2024, the company had accumulated losses of over VND 172.8 billion, short-term liabilities amounting to VND 584 billion, exceeding short-term assets by VND 81.29 billion. Short-term assets included overdue receivables, such as other receivables of VND 2.31 billion, customer receivables of VND 12.08 billion, and large unfinished production and business costs of VND 66.7 billion. Overdue debts and loans that have not yet been repaid total VND 231.8 billion.

“These events, together with the issues disclosed in Note 1, indicate the existence of significant uncertainty that casts doubt on the company’s ability to continue as a going concern,” stated the auditors.

In response to the auditors' qualified opinion, UDC explained that the outstanding production and business costs mentioned were the result of several completed projects with changes in volume and prices for materials and labor compared to the contracts, which have yet to be confirmed by the investor as payment. The company is now seeking confirmation from the investor and will analyze recoverability as soon as feasible. Similarly, the firm will evaluate and analyze the recoverability of outstanding receivables, making provisions if they are judged unrecoverable in the year-end financial statements.

Regarding overdue interest related to funds payable to the Enterprise Arrangement and Development Support Fund and dividends payable to state capital, UDC clarified that, according to the 2018 audit report No. 257/TB-KTNN KV XIII dated September 5, 2019, of the State Audit of Region XIII, the State Audit recommended that the Bà Rịa-Vũng Tàu People’s Committee determine the late payment interest for the state capital increase from the time of enterprise valuation to the official conversion into a joint stock company, and the dividends distributed from the state capital for the years 2009, 2010, 2011, and 2012, which have not been paid into the Enterprise Arrangement and Development Support Fund, and handle the overdue interest (over VND 66 billion) when valuing the enterprise for the divestment of state capital according to Prime Minister’s Decision No. 1232/QĐ-TTg and the Plan No. 110/KH-UBND of the Bà Rịa-Vũng Tàu People’s Committee.

"As of the date of this interim financial report, the firm had not received guidelines or instructions from the appropriate authorities on the procedures for assessing the enterprise's valuation for the disposal of state capital. "The business will record overdue interest once explicit direction is issued by the competent authorities," stated UDC leadership.

In response to the auditors' concerns about the company's ability to continue as a going concern, UDC leadership stated that, in addition to the reasons outlined in Note 01 of the interim financial report, the company's business activities in the first six months of 2024 have started to improve, and the company has signed many new contracts, which significantly boosted its revenue compared to the same period last year.

Additionally, this company has filed a plan for restructuring to the Bà Rịa-Vũng Tàu People's Committee for approval. On July 30, 2024, the provincial government issued Document No. 10602/UBND-VP, directing the company's state capital representative to vote in favor of the restructuring plan for the period 2021-2025 at the General Meeting of Shareholders.