GBVS board members to walk plank

It is a step that its leaders said would cut costs for the company that was weighed down with debts and punishments from local regulators.

Golden Bridge Vietnam Securities (GBVS), in which the Korean financial group holds a 49 per cent stake, is set to dismiss the two Vietnamese directors in an extraordinary general shareholders’ meeting in October 25. After the dismissal, there will be three Korean members remaining.

GBVS’s chairman, Moon Goo Sang, said the move of narrowing down the board “has the positive effects” on GBVS’s operations.

“It presents the tight management of a strategic partner and the effective usage of capital resources when processing the restructure,” said Sang.

“Korea’s group is in consideration to expand ownership in GBVS. We are strongly restructuring our company,” he added.

Sang’s statement is contrary to what he  told local media in May. Then, Sang said Golden Bridge would not increase the ownership ratio, saying  “there must be the participation of local people” in local market.

GBVS’s action comes as the company struggles with debts and punishments for its insolvency.
On October 1, the VSD submitted a statement to State Securities Commission (SSC), asking the market watchdog to suspend again the settlement and clearing activities of GBVS within 10 trading days.

On October 2, SSC sent the answer to VSD agreeing to the suspension, and required two stock exchanges to temporarily suspend the trading operations of GBVS, known by the stock ticker GBS.

VSD’s general director Phuong Hoang Lan Huong said  the company had on eight occasions violated rules in settling trading money to the centre and that a serious violation in September had led to the suspension of depositary activities for the company by September 30.

With just VND9.2 billion ($444,000) in cash and equivalents as of June 30, GBVS does not have a high liquidity. GBVS told VIR that it could cover  payments to VSD of some VND3.5 billion ($168,000). But sources familiar with the company said its obligations to investors and trading partners like banks and other brokerage firms who were damaged by its insolvency amounted to tens of billions dong.

Among the more than VND350 billion ($16.9 million) in liabilities held by GBVS, as much as VND324 billion ($15.6 million) is generated from stock trading activities.  This includes payments to VSD, investors and trading partners. Those liabilities included around VND140 billion ($6.7 million) it must pay back to VSD and nearly VND170 billion ($8.2 million) it must pay back to partners including Lien Viet Post Bank and BIDV, who had paid in advance the securities selling money to GBVS clients.