Drugmaker told to cancel public offering

The State Securities Commission has cancelled the upcoming public offer of 7 million shares of Vien Dong Pharmaceutical Co (DVD) due to the company’s failure to rectify shortcomings relating to its earlier suspension of the issue, the commission announced Tuesday.

DVD shares, traded on the HCM City Stock Exchange, responded to the decision yesterday by plunging to their floor price of VND36,300 (US$1.85) per share.

The commission suspended the issue last November and gave DVD 60 days to document revenues from contracts signed in 2010 with Lily France Joint Stock, HT Trading Devel-opment Technological Co Ltd and Vien Dong International Joint Stock Co – the majority of DVD’s revenue sources during 2007-10. Earlier, DVD had also provided inaccurate and misleading information about its partner, France’s Yvery, but it had since yet to provide corrected data.

The commmission deadline passed without the company producing the required documentation, so the commission acted to cancel the issue and ordered the company to refund VND69 billion (US$3.5 million) in deposits it had collected from interested investors with 15 days.

Investors who relied on the offer faced potential losses since DVD share prices had already been adjusted downward in anticipation of the issue.

The commission ordered DVD to make required disclosures within seven days and also said it would work with the police to gather evidence about DVD’s provision of misleading information.

DVD representatives could not be reached for comment yesterday.

As of December 31, DVD had net assets estimated at VND769 billion ($39.4 million) but the combined value of debts and other payables could reach as high as VND1.5 trillion (nearly $77 million). — VNS

Tags: Vietnam Drug industry