Trust as a lifeline in times of crisis

Once the largest construction contractor by revenue in Vietnam, Hoa Binh Construction Group has struggled in recent years amid mounting financial pressure, cash flow disruptions, and heavy losses. Its shares were delisted from the main exchange HoSE and now trade on the unlisted public companies market UPCoM as HBC.

Le Viet Hai, chairman of Hoa Binh, said the company’s ability to weather its most difficult period stemmed from trust built over nearly four decades.

“Many people ask why, at the darkest moment when cash had dried up, suppliers and subcontractors agreed to swap receivables for shares and become shareholders, and why banks continued to support us,” Hai said.

“The answer lies in the trust accumulated over 38 years. Without a track record of fairness and sincerity, our partners would have turned away.”

Hai said that during a liquidity crunch, what partners fear most is not delayed payments but being avoided. Instead of staying silent, Hoa Binh’s management met with each supplier and subcontractor to openly explain the situation and jointly seek solutions. The group has since moved from survival mode to a more aggressive recovery phase, he added.

A similar challenge confronted property developer Novaland Group, which faced its worst crisis following Vietnam’s corporate bond market turmoil in 2022. The disruption froze cash flows and left the group unable to meet commitments to customers, investors, partners, and creditors.

Novaland chairman Bui Thanh Nhon said the loss of trust outweighed financial damage. “This is the biggest loss in Novaland’s more than 32-year journey,” he said, while publicly taking responsibility and urging investors to view Novaland shares as a long-term investment. Nhon pledged to rebuild the company in a way worthy of shareholders’ trust.

After three years of restructuring, Novaland has made some progress, he said.

By contrast, losing market confidence can be devastating. Vietnamese electronics brand Asanzo, once among the top three players in Vietnam’s consumer electronics market, saw its reputation collapse after allegations in 2019 that Chinese-made products were falsely labelled as “Made in Vietnam”.

Major retailers removed Asanzo products from shelves, and the brand lost its “High-Quality Vietnamese Goods” certification. The company has since faded from the market, leaving behind tax-related controversies and penalties amounting to tens of billions of dong (VND10 billion = $385,060).

Truong Thanh Furniture, once a leading name in Vietnam’s wood industry, was hit by a financial scandal involving inflated inventory figures, resulting in losses of trillions of dong (VND1 trillion = $38.51 million). Strategic investor Vingroup withdrew its backing, shares plunged, and founder Vo Truong Thanh exited the company and compensated for losses.

Over the past decade, under new chairman Mai Huu Tin, Truong Thanh Furniture has been rebuilding, though the recovery remains challenging.

Trust preserved offers a path to recovery

Hai of Hoa Binh said companies can rebound from financial losses but not from the loss of credibility. “Losing money is losing little; losing health is losing much; but losing trust is losing everything,” he said.

In an increasingly transparent and interconnected world, nothing can be hidden indefinitely, making transparency a core rule of business, Hai added. He urged entrepreneurs to adopt transparency from day one — with partners and shareholders to mobilize resources, with employees to build loyalty, and with themselves to clearly assess their company’s capabilities.

Hai also stressed that ethics should precede talent. “Talent helps you move fast, but integrity helps you go far,” he said, adding that decency and fairness are among the most sustainable business strategies.

Finally, he said failure should not be feared, provided it is handled with integrity. “If you fail but still honor commitments to employees and partners to the very end, that failure is only a stopover,” Hai said. “As long as trust remains intact, there will always be a chance to start again.”