Challenges ahead as Hung Vuong accounting discrepancy hangs heavy

The audit of the company's financial reports showed a big difference between the audited and self-reported profit, revenue and liabilities.

As a result of recent accounting discrepancies, in early March FTSE Vietnam Index announced removing 'King of Pangasius' Hung Vuong from its portfolio by March 17 reports

Although the volume of stocks that the fund will sell is not large (only 3 million shares), in the short run, the increasing supply will influence HVG’s stock price, while in the long run, HVG’s recovery will hang on its ability to pay off trillions of VND in debts.

HVG’s business called attention to itself after releasing its audited financial report 2015-2016, which contained numerous differences compared to the unaudited one and investors are worried about the sharp increase in HVG’s receivables and liabilities.

Specifically, as of the end of the fiscal year 2015-2016, HVG’s liabilities were up to VND 13.3 trillion ($583.89 million), VND 2.2 trillion ($96.32 million) higher than at the beginning of the year. 

This amount accounted for 80.3 percent of the firm’s total assets, and was 4.13 times as much as its owners’ equity.


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