Vietnam Italy steel fined for $6,000

Vietnam Italy Steel JSC was fined for $6,000 for related party transactions

According to information published by the State Securities Commission of Vietnam (SSC), Vietnam Italy Steel JSC (VIS) has to suffer a fine of VND70 million ($3,040) because it did not comply with the deadline of publishing information on the portals of the SSC and the Ho Chi Minh City Stock Exchange, including documents and explanations about the differences in its business statement, as well as documents about shareholders' meetings in 2017, 2018, and first six months of 2019.

Regarding the violations of corporate governance regulations on related party transactions, according to its audited financial statement in 2018, VIS conducted transactions with Thai Hung Trading Co., Ltd., which is a member of VIS and has pre-existing relations with Thai Hung Trading JSC. However, the transactions between these two parties have not been approved by the board of directors of VIS.

Kyoei became the strategic partner of VIS in late 2017 after buying more than 14.7 million shares (20 per cent) from Thai Hung Trading JSC.

Through several subsequent transactions, Japanese steel manufacturers increased their ownership in VIS to 73.81 per cent by March 2019.

According to the fourth quarter financial statement of VIS, the company acquired VND1.14 trillion ($49.57 million) in net revenue in the fourth quarter, down 16.6 per cent on-year.

For the full year of 2019, the company reported VND4.95 trillion ($215.22 million) in revenue, down 12 per cent on-year and equalling 95 per cent of the initial expectation. Besides, the company reported a loss of VND218.7 billion ($9.5 million) last year.

In this year, the company expected to acquire VND3.63 trillion ($157.83 million) in revenue, down 21 per cent on-year. Besides, VIS issued the target of achieving a loss of VND65.5 billion ($2.85 million).