DGC Shares Hit Floor After Three More Senior Leaders Prosecuted for Environmental Violations

Overview

Duc Giang Chemicals Group (DGC) shares fell to the daily limit on July 23, 2026, after the company disclosed that three more senior leaders had been prosecuted by the Ministry of Public Security for environmental and resource violations. The stock has lost nearly two-thirds of its value over the past year, wiping out approximately VND 25,000 billion in market capitalization. This is the latest development in a series of legal actions against the company’s top management.

Key Facts

• DGC shares hit the floor at VND 37,700 on July 23, down 6.91% from the reference price of VND 40,500.
• The stock has declined nearly 50% since March 2026 and lost about two-thirds of its value over the past year.
• Market capitalization has fallen by nearly VND 25,000 billion over the past year.
• Three senior leaders were prosecuted on July 22: CEO Luu Bach Dat and Deputy General Director Phung Trong Tu for environmental pollution, and board member Nguyen Quoc Trung for violating resource exploration and extraction regulations.
• This follows an extraordinary general meeting on May 8, 2026, where three former board members were removed after being prosecuted and detained.
• Nguyen Quoc Trung was elected to the board at that meeting but has now been prosecuted just over two months later.
• Trading volume on July 23 exceeded 1 million shares.

What Happened

On July 23, Duc Giang Chemicals Group (HOSE: DGC) issued an irregular disclosure stating that three senior executives had been prosecuted by the Investigative Police Agency of the Ministry of Public Security. The decision was made on July 22. CEO Luu Bach Dat and Deputy General Director Phung Trong Tu face charges of causing environmental pollution, while board member Nguyen Quoc Trung is charged with violating regulations on resource exploration and extraction. All three have been banned from leaving their place of residence.

This is the second wave of legal actions against DGC’s leadership in just over two months. On May 8, the company held an extraordinary shareholder meeting to remove three board members—including former Chairman Dao Huu Huyen—after they were prosecuted and detained. The meeting elected three new board members, including Nguyen Quoc Trung, who is now among those prosecuted. At that meeting, Luu Bach Dat, who chaired the proceedings, acknowledged governance shortcomings and a neglect of legal compliance.

Market Context

DGC shares have been under severe pressure since the first wave of prosecutions in May 2026. The stock closed at VND 40,500 on July 22 with low volume, but on July 23 it plunged to the floor of VND 37,700 on heavy selling. Over the past year, the stock has lost nearly two-thirds of its value, reducing the company’s market capitalization by approximately VND 25,000 billion. The chemicals sector on HOSE has been broadly stable, but DGC’s governance issues have made it an outlier.

Strategic Significance

The repeated prosecutions of top executives signal deep-rooted governance and compliance failures at Duc Giang Chemicals. The company’s ability to retain qualified management and maintain operational stability is now in question. For long-term investors, the key risk is not just legal penalties but potential disruption to production, project delays, and loss of licenses. The company had already flagged delays in a VND 12,000 billion project in July 2026. Restoring investor confidence will require a complete overhaul of the board and management, as well as transparent remediation of environmental and regulatory violations.

What to Watch

• Further legal developments: additional prosecutions or court rulings could pressure the stock further.
• Management restructuring: whether the company can appoint independent, qualified leaders to replace those prosecuted.
• Operational impact: any disruption to production or project timelines, especially the delayed VND 12,000 billion project.
• Regulatory actions: potential suspension of mining licenses or environmental permits by authorities.
• Share price and volume: continued selling pressure and whether foreign investors reduce holdings.