Reviving a strategic share transfer

Kinh Bac Urban Development Corporation (KBC) recently announced that its Chairman, Dang Thanh Tam, has re-registered the transfer of over 86 million KBC shares valued at approximately 2.4 trillion VND (nearly $98 million).

On December 25, Tam registered to sell 86.55 million KBC shares, representing a significant portion of his current holdings of nearly 138.67 million shares. The transaction will occur between January 2 and January 28, 2025.

This marks the second attempt to execute the transfer. A prior registration, scheduled between November 25 and December 24, 2024, was unsuccessful due to incomplete procedures with relevant authorities.

If successful, the transfer will make DTT Investment and Development Joint Stock Company - a private firm owned by Tam - a major shareholder of KBC, with an 11.27% stake. Meanwhile, Tam’s direct ownership will drop to 52 million shares, or 6.79% of KBC’s equity.

On December 25, KBC shares closed at 28,150 VND, valuing the transfer at approximately 2.436 trillion VND.

DTT, established in January 2024 and primarily focused on real estate, was initially 90% owned by Tam. By November 19, his stake in DTT had decreased to 18.06%.

Benefits of consolidating shares

The practice of transferring shares to privately held companies is common among business leaders in Vietnam’s stock market. Consolidating assets into a single entity simplifies management, reduces personal tax burdens, and offers other strategic advantages.

For example, private firms are not subject to the 5% tax on cash dividends or the 0.1% personal income tax on securities sales. Similar strategies have been employed by notable entrepreneurs, including Nguyen Duy Hung (SSI), Dang Van Thanh, Le Phuoc Vu (HSG), Nguyen Duc Tai (MWG), and Tran Kim Thanh (KDC).

The Trump Organization connection
Tam’s move follows KBC’s announcement in September 2024 of a collaboration with the Trump Organization and Hung Yen Hospitality Services JSC, a KBC subsidiary, to develop a $1.5 billion complex in Hung Yen.

The project will feature a 54-hole golf course, luxury resorts, high-end villas, and state-of-the-art facilities designed to host special events and high-level conferences. In addition, the development will include premium hotels and a modern urban residential area.

Around the same time, KBC approved a plan to issue 250 million shares to professional securities investors, aiming to raise 6.25 trillion VND.

Family involvement in the ecosystem

Tam’s children are increasingly involved in the family’s business ecosystem. His second son, Dang Nguyen Nam Anh, recently emerged as the representative of KBC’s Hanoi office. Meanwhile, his daughter, Dang Nguyen Quynh Anh, owns over 13.3 million KBC shares and serves as a board member.

Tam and his wife, Nguyen Thi Kim Thanh, have four children: Dang Nguyen Quynh Anh, Dang Nguyen Nam Anh, Dang Nguyen Duy Anh, and Dang Nguyen Bao Anh.

Manh Ha