DRC CEO Prosecuted for Embezzlement; Vinachem Reassigns 10% Stake

Overview

Da Nang Rubber JSC (DRC), listed on HOSE, disclosed on 16 October that its CEO Le Hoang Khanh Nhut had been prosecuted for asset embezzlement, following approval by the Da Nang City People’s Procuracy on 14 October. State shareholder Vinachem simultaneously stripped Nhut of his role as its 10% capital representative at DRC and dismissed him as CEO, consolidating that stake under chairman Nguyen Xuan Bac. The case puts governance and state-ownership control at one of Vietnam’s larger tire makers under scrutiny.

Key Facts

• The Da Nang City People’s Procuracy approved the prosecution of Le Hoang Khanh Nhut on 14 October under clause 2, Article 353 of the Penal Code (asset embezzlement).
• The Da Nang City Police security investigation agency had opened the embezzlement case earlier, on 3 October.
• DRC filed an unusual-information disclosure with the Ho Chi Minh City Stock Exchange on 16 October confirming the prosecution.
• Vinachem removed Nhut as its representative for 10% of DRC’s charter capital on 16 October.
• Chairman Nguyen Xuan Bac’s represented stake rose from 10.51% to 20.51% after absorbing that 10% allocation.
• The board member and deputy CEO Van Trung Tam was placed in charge of operations until a new CEO is appointed.
• DRC will convene an extraordinary general meeting of shareholders to consider removing Nhut from the board of directors.

What Happened

According to the company’s unusual-information disclosure to the Ho Chi Minh City Stock Exchange, the Da Nang City People’s Procuracy approved the decision to prosecute Le Hoang Khanh Nhut, then CEO of Da Nang Rubber JSC, for asset embezzlement. The investigation agency of the Da Nang City Police had opened the underlying case on 3 October, and the procuracy’s approval followed on 14 October. DRC published the disclosure on 16 October, two days after the approval.

On the same day, state chemicals group Vinachem issued decisions removing Nhut as its representative for the 10% of DRC charter capital it holds, and approving his dismissal as CEO. That 10% allocation was reassigned to chairman Nguyen Xuan Bac, lifting his represented shareholding from 10.51% to 20.51%. The board member and deputy CEO Van Trung Tam was assigned to run the company until a permanent CEO is named, and DRC will hold an extraordinary shareholder meeting to vote on removing Nhut from the board. The disclosures do not state the amount allegedly embezzled or the transaction value involved.

Market Context

DRC closed at VND 9,880 on 17 October 2026, the session following the disclosure, putting the stock in low-single-digit-thousands territory typical of small-cap HOSE industrials. The tire maker sits in the rubber and automobile-parts supply chain, exporting to more than 50 markets including the US, Japan, South Korea, Brazil and Europe, and employs roughly 2,000 people in Da Nang. Leadership-related legal cases at state-linked manufacturers have been a recurring theme in Vietnamese equities, and the market typically applies a governance discount until the scope of any financial damage and the succession plan are clear.

Strategic Significance

The immediate issue for long-term holders is not the criminal proceeding itself but the concentration of state-shareholder control. Vinachem folding its 10% into the chairman’s representation gives Bac 20.51% of charter capital under one mandate, which simplifies decision-making but also reduces checks within the ownership structure at a moment when the board is being reshuffled. DRC’s export franchise and 2,000-strong distributor network are the durable assets; the risk is that management turnover and an unresolved embezzlement investigation distract from raw-material cost management and capacity planning. How quickly a permanent CEO is appointed, and whether the alleged loss touches company accounts or only third-party assets, will determine whether this is a governance event or a financial one.

What to Watch

• The extraordinary general meeting of shareholders and the vote on removing Nhut from the board.
• Announcement of a permanent CEO appointment and any further board changes.
• Investigative conclusions quantifying the alleged embezzled amount and whether DRC is a damaged party.
• DRC’s next quarterly earnings disclosure for any provisions, restatements or audit qualifications.
• Any Vinachem statement on its longer-term ownership intentions for its DRC holding.