Recently, the stock market and investors are buzzing about the delisting of HAG stock of Hoang Anh Gia Lai Joint Stock Company (“HAGL“). This issue still has a lot of conflicting opinions, agreeing, disagreeing with the delisting. So what is the provision of the law on delisting of stock and our opinion on whether HAG stock of Hoang Anh Gia Lai will be delisted on HoSE?
1. WHY IS HAGL IN RISK OF DELISTING OF STOCK?
At the time of making HAGL’s financial statements for 2017, 2018 and 2019, the financial statements contained an excepted audit opinion on the recoverability of receivable. However, by the beginning of 2021, HAGL has retroactively adjusted financial statement, so in the financial statements in April 2021, HAGL made a loss for three consecutive years (2017, 2018, 2019). Therefore, HAGL is facing the risk of being delisted for HAG stock due to the loss of business results for three consecutive years.
2. PROVISIONS OF LAW ON CASES OF DELISTING OF STOCK
Pursuant to point e Clause 1 Article 120 of the Government’s Decree No. 155/2020/ND-CP dated December 31, 2020 detailing the implementation of a number of articles of the Law on Securities (“Decree 155“), stock of a public company shall be delisted in case:
” The listed organization incurs losses in 03 consecutive years or total cumulative loss exceeds the charter capital contributed in reality or has a negative equity in the latest audited annual financial statement…”
Thus, in case a public company has production and business results with losses for 03 consecutive years, the company’s stock will be forced to delist in accordance with the law.
Currently, the law does not stipulate the case where the business results of financial statements retroactively leading to the delisting of stock. However, at the present time and according to HAGL’s latest financial statement on the results of three years 2017-2019, HAGL incurs losses in 03 consecutive years 2017-2019 and is the case of compulsory delisting of stock as prescribed in point e Clause 1 Article 120 Decree 155.
Regarding the order and procedures for delisting of stock, there is currently no legal document to replace the Circular No. 202/2015/TT-BTC of the Ministry of Finance on guidance on listing securities on the stock exchange (“Circular 202“). Therefore, in the spirit of Circular 202, whereby, the Stock Exchange shall be responsible for informing the listed organization and for publishing information upon the former’s detection of listed securities prone to delisting and request the listed organization and fund management enterprise to provide specific explanation. According to this regulation, the Stock Exchange will inform the listed organization, publish information upon the former’s detection of listed securities prone to delisting and request the listed organization to provide specific explanation.
In the case of HAGL, HAGL published the latest financial statements of 03 years 2017-2019 in April 2021. We have an idea that at this time, the Ho Chi Minh Ctity Stock Exchange has neither announced nor made information disclosure about the possibility that HAG stock of HAGL are likely to be delisted – maybe due to it has no solution for HAG stock as this is the first case that is likely to be delisted due to retroactive business results. In addition, HAGL’s business at 2021 is considered to be on the rise so that delisting at this time can greatly affect HAGL. However, no one can guarantee whether HAGL’s business results in 2022 will continue to grow or will continue to lose.
We suggest that, although the case of HAG stock is an exception in terms of retroactive business results leading to compulsory delisting, however, we need to strictly apply in accordance with the law. Because before the law, there are no exceptions. Therefore, in this case, HAG stock are subject to compulsory delisting in accordance with Decree 155.
Thus, HAGL’s business is currently being evaluated as potential, so if HAG stock are delisted, it can be transferred to Upcom. Since then, HAGL have efforts to restore its business sales, generate profits, rebuild investor’s confidence and when meeting the conditions for listing again, HAGL’s HAG stock can still return to Hose.
The above is our legal share about the case of delisting of stock for HAG stock of Hoang Anh Gia Lai Joint Stock Company. Hope this article is useful to you.
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