The ruling of the HCMC People’s Court in the divorce case between Dang Le Nguyen Vu, chairman and general director of Trung Nguyen Group, and his wife, Le Hoang Diep Thao, has stoked controversy as the court’s decision asking Thao to sell all her shares in the company to Vu supposedly violates the Law on Enterprises.

Dang Le Nguyen Vu (L), chairman and general director of Trung Nguyen Group, and his wife, Le Hoang Diep Thao

On March 27, the court made the final ruling in the divorce case between Vu, Vietnam’s so-called coffee king, and his wife.

Accordingly, Vu will continue to manage the firm and possess 60% of the shared assets after the divorce, while Thao will receive the remaining 40%.

The court explained that Vu had contributed more than Thao to the establishment and development of Trung Nguyen Group.

In addition, the division of the group’s shares would cause difficulties to the effective operation of the firm, so the court ruled that Vu should buy all of Thao’s shares and pay her in cash. Thus, Thao will no longer be a shareholder of Trung Nguyen Group.

According to many experts, it is beyond the jurisdiction of the court to force Thao to receive cash instead of shares. The verdict has also taken away Thao’s rights and benefits in line with the Enterprise Law and Trung Nguyen Group’s own rules.

Further, it is beyond the court’s purview to set the value of Trung Nguyen’s assets.

Although the Enterprise Law has regulations allowing shareholders to freely transfer their shares to others, lawyer Truong Thanh Duc, chairman of Basico law firm, stated that the Enterprise Law cannot be applied in this case as it does not focus on the share ownership dispute between the two largest shareholders of Trung Nguyen but on their divorce and division of assets.

According to the Law on Marriage and Family, the couple’s assets should have been divided equally, with reference to their contributions, Duc noted, adding that it is the court’s right to decide the asset ownership rate. Either the husband or the wife can propose the court amend the first-instance judgment if they think it is unreasonable.

Meanwhile, Lam Minh Chanh, CEO of the online business school BizUni, told the Saigon Times that the court had appraised Trung Nguyen’s value by summing up the value of the group’s assets. However, the method should be applied to newly established and dissolved enterprises only.

The value of enterprises operating normally, such as Trung Nguyen, should include the profits from its long-term business activities, Chanh added.

SGT