LDG's unfinished projects of hundreds of hectares

After Chairman of the Board of Directors Nguyen Khanh Hung was arrested, LDG Investment Joint Stock Company said that this incident only related to the Tan Thinh residential area project in Dong Nai and did not affect other projects invested and developed by LDG.

LDG affirms that it is still operating normally and will try its best to stabilize all business activities, ensuring the interests of customers, partners and shareholders.

LDG's predecessor is Long Dien Real Estate Joint Stock Company, established in 2010 with a charter capital of 50 billion VND. Up to now, LDG has developed into a mid-range investor, specializing in developing land products, apartments, pre-built townhouses, and urban areas.

According to the website, LDG owns a land fund of nearly 1,500 hectares and total assets of VND6,500 billion. The company also has the ambition to become one of the top 5 real estate and urban developers in Vietnam.

In its most recent annual report, LDG said it has been developing 13 real estate projects from North to South. However, a number of these projects remain unfinished.

Tan Thinh Residential Area (commercial name Viva Park) is the project that got LDG Chairman Nguyen Khanh Hung into trouble with the law. This project covers an area of ​​over 18.2 hectares in Giang Dien Commune, Trang Bom District, Dong Nai Province with a total investment of nearly VND1,350 billion.

The investigation agency has not yet announced Mr. Hung's specific violations. However, according to the previous conclusion of the Dong Nai Provincial Inspectorate, LDG built 488 villas, townhouses, and 290 unfinished houses at the Viva Park project without being allocated land, changing the purpose of use, and without being granted a construction permit to invest in the project.

In Giang Dien commune, LDG also developed another project of nearly 92 hectares, The Viva City. This project has a scale of 3,200 adjacent land plots, 37 villa plots with a total investment of more than 1,500 billion VND. However, this project of the company also got into many controversies when it was unable to hand over red books to customers for 13 years.

In August, the Dong Nai Provincial People's Committee requested LDG to release nearly 600 red books from the bank to hand over to customers who bought land at the project. Many people said they bought land at The Viva City since 2010, paid 95% of the contract value but have not received the red books and have not been allowed to build houses.

The investment period for this project expires at the end of 2022, but LDG has not yet completed many social infrastructures such as kindergartens, secondary schools and medical facilities. The company has requested an extension to continue implementing the project. However, the Dong Nai Provincial People's Committee has not yet approved because LDG has not yet deposited funds and needs to review the investor's capacity according to regulations.

In Ho Chi Minh City, two apartment projects High Intela and West Intela were opened for sale by LDG's subsidiary and collected money from some customers since 2018, but have yet to hand over the houses.

High Intela project is located on Vo Van Kiet Avenue, District 8, with 2 blocks 22 floors high, while West Intela is located on An Duong Vuong Street, District 8, with 1 block 21 floors high.

Both projects have been suspended for several years and the investor cited problems in calculating land use fees as the reason. By September 30, LDG recorded unfinished production and business costs at the High Intela project of about VND168 billion and the West Intela project of VND88.5 billion. At the 2022 annual meeting, LDG leaders informed that there were about 500 unsold products at these two apartment projects.

In addition to the two projects above in Ho Chi Minh City, this investor also has an unimplemented project, LDG Riverside in Thu Duc with a scale of 3 blocks, 30 floors high, total capital of about 5,200 billion VND. This project was bought by LDG from Quoc Cuong Gia Lai 3 years ago.

In addition to unfinished projects, LDG also owns two "huge" land funds in Da Nang and Quang Ninh. Of which, the LDG Grand Da Nang project has an area of ​​over 29 hectares, with a total investment of over VND8,000 billion, located in Son Tra district. This is one of the projects that LDG considered a key project last year and is expected to achieve revenue of VND14,000 billion. However, in October, LDG approved the policy of transferring this project to pay off bonds and bank debts.

The LDG Grand Ha Long project is also part of the company’s long-term strategy. This project covers more than 400 hectares, with a total investment of about VND26,500 billion in Hoanh Bo district, Quang Ninh province. The former Chairman of LDG had expected to gain large profits from this project even if LDG did not develop it itself but transferred it to a partner.

Before Mr. Nguyen Khanh Hung was arrested, LDG was also affected by the general difficulties in the real estate market. In 2022, LDG's consolidated profit was 4 billion VND, only 1.54% compared to 2021. In the first 9 months of this year, the company suffered a pre-tax loss of more than 218 billion VND when revenue reached less than 2 billion VND (equal to 1% of the same period).