DGC Nominates Two Directors to TSB Board After Prosecutions

Overview

Duc Giang Chemicals (HOSE: DGC) approved a resolution nominating two candidates to the board of Tia Sang Battery (HNX: TSB), the subsidiary in which it holds 51% of charter capital as of June 30, 2026. The board reshuffle follows the criminal prosecution of two TSB board members and comes as TSB swings to a first-half net loss and loses margin-trading eligibility on HNX.

Key Facts

• DGC holds 51% of TSB’s charter capital as of June 30, 2026, per the resolution dated September 10.
• DGC nominated Nguyen Tat Dai and Nguyen Van Thoa as TSB board candidates for the 2023-2028 term.
• The election is scheduled for an extraordinary annual general meeting on October 2, the second such meeting.
• Two TSB board members, Luu Bach Dat and Phung Trong Tu, were criminally prosecuted; both have since been replaced in their executive roles.
• TSB reported H1 2026 net revenue of more than VND 86 billion, down about 14% year on year, and a net loss of VND 3.2 billion versus a profit of over VND 315 million a year earlier.
• Accumulated undistributed after-tax profit turned negative at VND 1.4 billion as of June 30, from positive VND 2.1 billion at the start of the year.
• HNX placed TSB shares on its no-margin list from August 21 due to negative six-month and undistributed after-tax profit.

What Happened

According to the September 10 resolution, Duc Giang Chemicals will put forward Nguyen Tat Dai and Nguyen Van Thoa for election as additional members of Tia Sang Battery’s board at the second extraordinary annual general meeting on October 2. The move is intended to complete the board after Luu Bach Dat and Phung Trong Tu were prosecuted. TSB had already removed Luu Bach Dat as board chairman, appointing Doan Van Quang in his place, and removed Phung Trong Tu as general director, appointing Luong Van Tuyen. The board currently has three members: Doan Van Quang, Luong Van Tuyen and Pham Thi Thu Ha.

The audited H1 2026 financial statements show net revenue of more than VND 86 billion, down roughly 14%, with gross profit of about VND 9.1 billion, also down about 14%. Selling expenses rose 14% to VND 8.9 billion and general and administrative expenses edged up 2.2% to VND 3.2 billion, producing a net loss of VND 3.2 billion. The auditor flagged that TSB received notice from the Ministry of Public Security’s investigation police of a prosecution for environmental pollution and accounting violations causing serious consequences at Duc Giang Chemicals and related units, with key managers among the accused. TSB’s management said the conduct predates the individuals’ current roles and does not affect operations, and the auditor said the matter does not change its unqualified opinion.

Market Context

DGC closed at VND 46,750 on September 11, 2026 on HOSE, while TSB closed at VND 19,300 on HNX. TSB’s placement on HNX’s no-margin list from August 21 removes leverage from the stock, a liquidity constraint for a small-cap industrial name. The news sits within a broader Vietnamese chemicals and industrials sector where parent-subsidiary governance and environmental compliance have drawn increasing regulatory scrutiny.

Strategic Significance

For DGC, the nomination is a governance consolidation: with 51% ownership, the parent can now seat directors aligned with its interests and stabilize a subsidiary whose leadership was disrupted by prosecution. The strategic question is whether DGC treats TSB as a core battery-materials asset or a portfolio holding to be restructured. TSB’s negative retained earnings and no-margin status limit its ability to raise capital independently, making DGC’s balance sheet the likely backstop for any turnaround. The unresolved environmental prosecution at DGC level remains the larger overhang for the parent’s investment case.

What to Watch

• TSB’s extraordinary AGM on October 2 and whether both DGC nominees are elected.
• Any further disclosures from the Ministry of Public Security investigation into Duc Giang Chemicals and related units.
• TSB’s Q3 2026 results and whether the net loss narrows or retained earnings return to positive.
• HNX’s review of TSB’s margin-trading status once profitability criteria are reassessed.
• DGC’s own filings for any capital support, restructuring or impairment related to its 51% TSB stake.