DIG Chairman Loses Large Shareholder Status After Margin Call

Nguyen Hung Cuong, Chairman of the Board of Directors of DIG (Investment and Development Company of Construction), a major real estate developer in Vietnam, has lost his status as a large shareholder due to the forced liquidation of his shares. On July 24, Cuong announced that securities firms had liquidated over 11 million shares owned by him personally over three days. Following this liquidation, his stake in DIG now stands at approximately 29 million shares, representing nearly 3.7% of the company's total outstanding shares, falling below the threshold for a large shareholder (typically 5%). As DIG's stock price dropped below VND 11,000, several securities firms, including MBS, Mirae Asset Vietnam, LPBS, and Vietcap, proceeded with the forced sale of Cuong's shares. The exact number of shares liquidated may vary from the announced estimates due to market price fluctuations affecting the value of collateral. Forced liquidation of shares occurs when investors utilize margin trading and fail to deposit additional funds when the stock price falls below the securities firm's required threshold. Typically, securities firms notify clients one to two days before liquidation. To avoid this, investors must deposit more funds into their margin accounts to meet the minimum safety level set by the securities firm. Cuong's shares have been subject to forced liquidation for several months. Compared to the end of last year, his shareholding has decreased by 41 million shares, a reduction of over 5% in his stake. His mother and sister, who are also related to him, are similarly facing liquidation pressure, holding a combined total of approximately 18 million shares, or 2.24% of the company. DIG's stock closed the recent trading week at VND 10,300, marking a three-year low. The stock has fallen approximately 40% year-to-date. Established in 1990 as an enterprise under the Ministry of Construction, DIG was corporatized and listed on the stock exchange between 2007 and 2009. The company is one of Vietnam's leading real estate developers, possessing hundreds of hectares of land across various provinces such as Ho Chi Minh City, Dong Nai, and Ninh Binh. The company's management has set a target of VND 3 trillion in revenue and VND 600 billion in consolidated pre-tax profit for the current year. While the financial report has not yet been released, first-half profits are estimated to have increased by about 66% compared to the same period last year. Source: VnExpress