VietNamNet Bridge – Following a series of state owned conglomerates and general corporations, Quoc Cuong Gia Lai Group has become the “aiming point” of the public, after a lot of problems of the real estate giant were discovered.

Thirteen out of the 15 big projects expected to bring money to Quoc Cuong Gia Lai in 2011-2013 are medium and high end real estate projects. Meanwhile, the sector proves to be the biggest sufferer in the economic downturn.

Quoc Cuong Gia Lai group has been well known to everyone as a big guy in the real estate sector. However, the information about the group reaching out to the public mostly relates to scandals, rather than the group’s business performance.

Nguyen Quoc Cuong, Deputy General Director of Quoc Cuong Gia Lai, deserves credit for making the company famous to everybody. However, the information about Cuong relates mostly to his luxury car collection or beauties.

Cuong is also the spokesman of the group, but he very rarely turns up before the press to talk about the company’s business activities. The person who comes forward and answers the questions raised from the public has always been Nguyen Thi Nhu Loan, Chair of the Board of Directors and CEO of Quoc Cuong Gia Lai, who is the mother of Cuong.

Just some months after the company entered the bourse in late 2010, Quoc Cuong Gia Lai surprised investors with the move to raise the chartered capital by two folds. The company issued shares to existing shareholders and workers at preferential prices, while workers were told not to transfer shares within one year since the issuance day.

The six-month profit of the company soared surprisingly by four times. However, the workers of Quoc Cuong Gia Lai refused to buy the 40 percent of shares specifically issued to the company’s staff.

A series of scandals relating to Quoc Cuong Gia Lai have occurred recently, including the disputes with the clients who buy products at the Quoc Cuong Gia Lai 1 apartment bloc in HCM City, at the Trung Nghia residential quarter in Da Nang City. The public was also stirred up by the information that Quoc Cuong Gia Lai’s clients were told to remit money into two accounts – the company’s account and the director’s account – for making payment for the apartments they bought.

Quoc Cuong Gia Lai also caught the special attention of the public in early June 2012 with the information that Nguyen Thi Nhu Loan offered gifts – hundreds of thousands of shares - to some individuals, despite the reported big loss of the group.

After it successfully mobilized 1 trillion dong from the share issuance in 2010, Quoc Cuong Gia Lai could also find hundreds of billions of dong by issuing corporate bonds. The capital has been injected in real estate projects, which means that Quoc Cuong Gia Lai has “put all the eggs it has into one basket,” instead of putting capital into different business fields to disperse risks.

The noteworthy thing is that the real estate market began showing its problem in 2010 already, but Quoc Cuong Gia Lai still put a high expectation on the market.

Quoc Cuong Gia Lai has registered business in many different fields including wood trade, hydropower, rubber and real estate. However, 90 percent of the income of the group was brought by the real estate trade in 2010.

Most recently, investors have got started at the information that the company has borrowed money from its shareholders with the total sum reaching 150 billion dong. Meanwhile, the company also lent the shareholders 100 billion dong. Quoc Cuong Gia Lai, for example, borrowed 1 billion dong from Lau Duc Duy – a shareholder, while it lent 33.5 billion dong to Duy.

Nguyen Tri Hieu, a banking expert, has affirmed that such a big company would surely “have problems” if it has to borrow money from individuals.

Compiled by C. V