DRC CEO Le Hoang Khanh Nhut Prosecuted for Embezzlement, Dismissed

Overview

Da Nang Rubber JSC (HOSE: DRC) disclosed on 16 October 2026 that CEO and board member Le Hoang Khanh Nhut had been prosecuted for asset embezzlement, and the board immediately removed him as CEO and legal representative. The same day, state shareholder Vietnam National Chemical Group (Vinachem) withdrew Nhut as its capital representative at DRC and shifted the represented stake to Chairman Nguyen Xuan Bac, lifting his share from 10.51% to 20.51% of charter capital.

Key Facts

• Prosecution decision No. 521/QD-VKS-P3 dated 14 October 2026, issued by the Da Nang City People’s Procuracy, approved charges against Nhut under Clause 2, Article 353 of the Penal Code; the underlying prosecution decision was dated 3 October 2026.
• The board dismissed Nhut as CEO and terminated his status as legal representative, appointing board member and Deputy CEO Van Trung Tam to run the executive board until a permanent replacement is named.
• Nhut was the highest-paid DRC executive in H1 2026, with total income of about VND 667 million, or more than VND 111 million per month.
• Vinachem transferred its DRC capital representation from Nhut to Chairman Nguyen Xuan Bac, raising Bac’s represented share from 10.51% to 20.51% of charter capital, and requested an extraordinary general meeting to remove Nhut from the board.
• H1 2026 net revenue was over VND 2,330 billion, down about 8.8% year on year, while after-tax profit reached VND 48 billion, up 15.6% or roughly VND 6.5 billion; pre-tax profit was about VND 58 billion, up nearly 20%.
• Full-year 2026 targets are VND 5,600 billion in revenue and VND 155 billion in pre-tax profit, leaving H1 completion at about 42% and 37% respectively.
• Nhut, born in 1974, joined DRC’s project management technical department in 2011-2015, became Deputy CEO in December 2015, joined the board in April 2019 and took the CEO role on 1 November 2020.

What Happened

The company said it received the procuracy decision approving the prosecution of Nhut, a board member and CEO, on a charge of asset embezzlement. In response, the board passed a resolution dismissing him as CEO and ending his legal-representative status, and assigned Deputy CEO Van Trung Tam to lead the executive board pending a replacement. Vinachem separately decided that Nhut would cease representing its capital at DRC, and it asked the company to organise an extraordinary general meeting of shareholders to consider removing him from the board.

The disclosure also shed light on executive pay: the reviewed H1 2026 financial statements show Nhut was the best-paid member of DRC’s leadership, earning roughly VND 667 million over six months. The filing does not disclose the alleged value of the assets involved in the embezzlement charge, the identity of any co-accused, or the date of the planned extraordinary shareholder meeting.

Market Context

DRC shares closed at VND 9,880 on 16 October 2026 on the Ho Chi Minh City Stock Exchange, the day the prosecution and dismissal were announced. The stock sits in the rubber and tyres segment of the Vietnamese materials and automotive-parts complex, where DRC is a long-standing Vinachem affiliate and a domestic supplier of radial tyres. The H1 result - falling revenue but expanding margins - mirrors a broader pattern among Vietnamese industrial exporters in 2026, with softer top-line demand offset by lower input costs and a richer product mix.

Strategic Significance

For long-term holders, the central question is governance rather than the criminal case itself. Vinachem’s decision to consolidate its represented stake under Chairman Nguyen Xuan Bac, moving from 10.51% to 20.51%, concentrates state-shareholder control at the board level and reduces the risk of a leadership vacuum during the investigation. The interim arrangement under Van Trung Tam keeps day-to-day operations running, but the pending extraordinary general meeting will determine whether the board is reconstituted and whether DRC’s strategy - capacity expansion in radial tyres and export diversification - continues unchanged. Investors should treat the H1 margin improvement as the operating baseline against which any disruption from the leadership change will be measured.

What to Watch

• The date and agenda of the extraordinary general meeting called to remove Nhut from the board, and whether Vinachem nominates a permanent CEO.
• Any further procuracy or police statements quantifying the alleged embezzled assets or naming additional defendants.
• Q3 2026 results and whether the 8.8% revenue decline and 15.6% profit growth trend persists under interim management.
• Progress against the 2026 targets of VND 5,600 billion revenue and VND 155 billion pre-tax profit, with H1 completion at 42% and 37%.
• Foreign-ownership and major-shareholder filings on HOSE for any change in Vinachem’s effective control position.