DGC Nominates Three New Board Members After Chairman Arrest

Overview

Duc Giang Chemicals Group (DGC) has announced the nomination of three candidates to fill board vacancies after three current board members, including Chairman Dao Huu Huyen, were arrested and detained for alleged environmental and accounting violations. The extraordinary general meeting of shareholders is scheduled for May 8.

Key Facts

• Three board members were arrested and detained: Chairman Dao Huu Huyen, Vice Chairman Dao Huu Duy Anh, and member Pham Van Hung.
• The remaining two board members called an extraordinary shareholder meeting for May 8.
• A shareholder group holding 172.4 million shares (45.41% of voting rights) nominated three candidates: Dao Huu Kha, Nguyen Quoc Trung, and Pham Duy Tung.
• Dao Huu Kha, brother of the arrested chairman, owns 22.7 million shares (5.97% of DGC).
• Nguyen Quoc Trung, head of DGC’s project department, owns 60,120 shares (0.016%).
• Pham Duy Tung, director of DGC’s real estate subsidiary, owns 90,958 shares (0.024%).
• The criminal case involves charges of environmental pollution, illegal resource exploration, and accounting violations.

What Happened

Duc Giang Chemicals Group (DGC) disclosed minutes of a meeting where a group of shareholders representing 45.41% of voting rights nominated three individuals to join the board of directors. The nominations come just two days before the extraordinary shareholder meeting scheduled for May 8.

The three nominees are Dao Huu Kha, Nguyen Quoc Trung, and Pham Duy Tung. Dao Huu Kha is the brother of the arrested chairman and currently works as a project officer at DGC’s subsidiary in Lao Cai. He holds a significant 5.97% stake in the company. Nguyen Quoc Trung has been with DGC since 1992, rising from worker to head of the project department. Pham Duy Tung is the director of DGC’s real estate subsidiary and also manages a hotel company.

Market Context

DGC shares closed at VND 56,000 on April 15, down 1.07% with volume of 332,600 shares. The stock has been under pressure since the arrests were announced. DGC is listed on HOSE and is one of Vietnam’s largest chemical producers. The leadership crisis adds uncertainty to a stock that had previously benefited from strong earnings in the fertilizer and industrial chemicals segments.

Strategic Significance

The nominations aim to restore board functionality after the arrests of three key directors. The inclusion of Dao Huu Kha, a family member of the arrested chairman, suggests continuity of the founding family’s influence. However, the ongoing criminal investigation could lead to further governance challenges. The new board will need to navigate potential reputational damage, regulatory scrutiny, and operational disruptions while maintaining investor confidence.

What to Watch

• Outcome of the extraordinary shareholder meeting on May 8 and approval of nominees.
• Further developments in the criminal investigation, including potential charges against other executives.
• DGC’s Q1 2026 earnings report and any impact on operations.
• Any changes in foreign ownership limits or investor sentiment.
• Regulatory actions from the State Securities Commission or other authorities.