Duc Giang Chemicals (DGC) to Remove Chairman and Son After Arrest

Overview

Duc Giang Chemicals (DGC) has proposed dismissing Chairman Dao Huu Huyen and his son, Vice Chairman Dao Huu Duy Anh, following their arrest and detention by police in March 2025. The company also faces a warning and margin trading suspension from HoSE due to a delayed audited financial report for 2025.

Key Facts

• DGC plans to dismiss Chairman Dao Huu Huyen and Vice Chairman Dao Huu Duy Anh at the annual general meeting on May 8, 2025.
• The two were arrested and detained on March 17, 2025, by the Ministry of Public Security’s investigative police.
• After the dismissals, the board will have only two members: CEO Luu Bach Dat and Nguyen Thi Thu Ha.
• DGC plans to elect three new board members for the remainder of the 2024-2029 term; candidates have not been announced.
• DGC reported 2025 preliminary net revenue of VND 11,266 billion (+14% YoY) and net profit of VND 3,188 billion (+3% YoY), exceeding the full-year target.
• DGC has not yet published its audited 2025 financial report, 19 days past the deadline.
• HoSE placed DGC shares under a warning and suspended margin trading effective April 23, 2025.

What Happened

Duc Giang Chemicals (DGC) disclosed in documents for its annual general meeting on May 8 that it will seek shareholder approval to remove Chairman Dao Huu Huyen and his son, Vice Chairman Dao Huu Duy Anh, from the board. The move follows their arrest and detention on March 17 by the Ministry of Public Security’s investigative police. The company stated that the dismissals are necessary due to the legal situation.

If approved, the board will shrink to two members: CEO Luu Bach Dat and Nguyen Thi Thu Ha. To restore the board to its required size, DGC plans to elect three new members for the remainder of the 2024-2029 term, though it has not yet named candidates. Separately, DGC has not filed its audited 2025 financial report, which was due by March 30. As a result, HoSE placed DGC shares under a warning and suspended margin trading from April 23. DGC has submitted an explanation to the State Securities Commission and HoSE, citing force majeure and requesting an extension.

Market Context

DGC shares closed at VND 56,000 on April 15, down 1.07% with low volume of 332,600 shares. The stock has been under pressure since the arrests and the trading restrictions. DGC is listed on HoSE in the chemicals sector. The delayed audit and leadership crisis add uncertainty to the company’s governance and compliance standing.

Strategic Significance

The removal of the founder and his son marks a significant governance shift at DGC, a leading Vietnamese chemical producer specializing in phosphoric acid, yellow phosphorus, and fertilizers. The arrests and delayed audit raise questions about internal controls and regulatory compliance. The company’s strong 2025 preliminary results (revenue up 14%, profit up 3%) suggest operational resilience, but the leadership vacuum and regulatory overhang could weigh on investor confidence. The election of new board members will be critical to restoring stability and trust.

What to Watch

• Outcome of the May 8 AGM: approval of dismissals and election of new board members.
• Publication of the audited 2025 financial report and any restatements.
• Further legal developments regarding the arrested executives.
• HoSE’s decision on lifting the warning and margin ban after the audit is filed.
• Q1 2026 earnings release to gauge operational impact.