Le Hoang Diep Thao, the wife, has been ordered to sell all her shares in the company to Dang Le Nguyen Vu, and the legal fraternity is saying this was beyond the court’s jurisdiction in what was only a divorce case.
The Ho Chi Minh City People’s Court ruled last week that the stocks and cash in Trung Nguyen Coffee Group shared by Vu and Thao would be split 60:40 in the former’s favor. All their lands and buildings would be split equally.
But since the division of the company’s shares would cause difficulties in managing it, Vu would acquire all of Thao’s shares for cash and she would no longer be a shareholder. The court explained the decision by saying Vu had contributed more than Thao to establishing and developing the company.
Courts can only split properties based on their value if they cannot be divided properly, Nguyen Huu The Trach, a lawyer from the HCMC Bar Association, said, pointing out that brand ownership, for example, falls under this category.
On the other hand, shares can easily be divided based on the Civil Law and the Law on Enterprises, he said.
"The court’s verdict ... forcing Thao to receive cash ... instead of shares is not in line with the laws."
"After splitting the shares, the court should have let Vu and Thao as shareholders to settle the matter themselves in accordance with the Law on Enterprises and their company’s own rules."
Another lawyer, Nguyen Thi Huyen Trang, also thought the court’s ruling was beyond its ambit in a divorce case. Disputes regarding marriage and families do not involve the rights to run companies or the rights of shareholders, she said.
The court’s ruling had taken away Thao’s rights as a shareholder, she added.
The couple never reached any agreement. Vu had wanted to acquire all the shares of Trung Nguyen Group by paying her their value, but Thao had rejected the offer. "As such, the court’s ruling [to give all of Thao’s shares to Vu] is unlawful," Trang said.
The couple married in 1998 and fell out in 2013, and Thao filed for divorce two years later.
The value of the couple’s combined stake in the Trung Nguyen Group, a leading coffee chain, is estimated at over VND5.7 trillion ($245.14 million). It had revenues of VND3.95 trillion ($170.5 million) and pretax profits of VND681 billion ($29.4 million) in 2017. It has 200,000 coffee stores around the country.
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