Recently, the delisting of ITA shares of Tan Tao Investment and Industry Corporation has drawn significant attention from the investment community. This event not only directly impacts shareholders but also provides valuable lessons for investors.

1. Overview of ITA Corporation

Tan Tao Investment and Industry Corporation (ITA) primarily operates in the industrial real estate sector. Established with the ambition of becoming a leading developer of industrial parks in Vietnam, the company has faced significant challenges in maintaining its listing status.

In September 2024, HoSE issued a document requesting Tan Tao to promptly address its violations of information disclosure regulations. HoSE stated that if the company failed to resolve these issues, ITA shares would face mandatory delisting. However, since the suspension of trading, the company’s violations of disclosure regulations have not been rectified, continuing to occur and seriously breaching disclosure obligations, thereby affecting shareholder rights. As a result, HoSE decided to proceed with the mandatory delisting of ITA shares.

2. Main Reasons for Delisting

2.1. Violations of Information Disclosure Regulations

Tan Tao violated significant information disclosure obligations, leading to its mandatory delisting as stipulated by the regulations.

  • Repeated delays in disclosing periodic and extraordinary information
    ITA failed to meet deadlines for critical reports, including:
    • Periodic information as per Article 14, Clause 10 of Circular 96/2020/TT-BTC:
      • 2023 audited financial report: Not disclosed before the deadline of March 30, 2024.
      • 2023 annual report: Not submitted before the deadline of April 20, 2024.
      • 2024 semi-annual reviewed financial report: Deadline of August 29, 2024, but remained unpublished.
    • Extraordinary information as per Article 15, Clause 11 of Circular 96/2020/TT-BTC:
      • Decision to initiate bankruptcy proceedings by the Ho Chi Minh City People’s Court.
  • Non-compliance with transparency requirements for listed companies
    • Violated Clause 2, Article 5, and Clause 2, Article 6 of the Securities Law, which emphasize fairness, transparency, and safety in securities activities.

ITA breached these regulations for the following reasons:

  • Failed to disclose financial reports on time and adequately.
  • Lacked transparency regarding its actual financial situation, including insolvency risks and bankruptcy.
  • Provided no satisfactory explanation for delays, even after warnings from HoSE.

Failure to report significant events affecting stock prices. Important events such as:

  • The court’s decision to initiate bankruptcy proceedings.
  • Financial difficulties (e.g., cash flow imbalance, inability to pay debts).

The lack of proactive and transparent disclosure by ITA resulted in:

  • Shareholders and investors not being fully informed to make appropriate decisions.
  • ITA’s stock price experiencing severe negative fluctuations (suspended trading since September 26, 2024).
  • A decline in market confidence severely damaged the company’s reputation.

2.2. Issues with Financial Reports

  • Inaccuracy and lack of transparency in financial reports
    • Lack of transparency: Some major items in the reports were insufficiently explained, raising doubts about the accuracy of figures. Examples include loans, operating expenses, and long-term assets that were not clearly detailed.
    • Delayed data provision: The delay in releasing financial reports prevented investors from accessing timely information to assess stock value.
  • Insufficient explanations for major items
    • Significant items such as operating costs, liabilities, and assets were unclear, leading to suspicions that the company might be concealing serious financial issues.
    • Independent auditors may have flagged these ambiguities, further eroding trust in the company’s reports.
  • Suspicions of dishonesty in financial reporting
    • Indicators suggesting that ITA’s financial reports might not reflect the actual situation:
      • Incomplete disclosure of bad debts, solvency, and cash flows.
      • Assets and major investments with unclear origins or purposes.
  • Penalties imposed:
    • ITA shares were subjected to multiple sanctions under Point c, Clause 1, Article 46 of the Securities Law:
      • Warning: For more than four violations of disclosure regulations within a year.
      • Under control: For submitting the 2024 semi-annual reviewed financial report over 30 days late.
      • Suspended trading: For continued violations of disclosure regulations after being placed under restricted trading.
  • As of now, Tan Tao Investment and Industry Corporation has not disclosed the following information:
    • 2023 audited financial report (deadline: March 30, 2024).
    • 2023 annual report (deadline: April 20, 2024).
    • 2024 semi-annual reviewed financial report (deadline: August 29, 2024).
    • Bankruptcy proceedings decision from the Ho Chi Minh City People’s Court.
  • Consequences: Mandatory delisting of ITA shares (Point o, Clause 1, Article 120 of Decree 155/2020).

3. Impacts of the Delisting

3.1. On Shareholders

Difficulties in trading and liquidity of shares

  • When ITA shares are delisted, shareholders can no longer trade on HoSE, causing the shares to lose liquidity.
  • Share transfers can only occur through off-exchange (OTC) negotiated transactions, which are often time-consuming, expensive, and typically conducted at values lower than listed market prices.
  • This creates challenges for shareholders, especially those holding large quantities of shares, in withdrawing capital or optimizing their investment portfolios

Reduction in investment asset value

  • When shares are delisted, their value often drops significantly as the market views this as a high-risk signal. Investors struggle to find buyers, and the stock price in the over-the-counter market is often significantly lower than pre-delisting levels.
  • Small shareholders, who rely on dividends or the ability to sell shares for liquidity, bear the heaviest losses.

Limited access to company information
After delisting, the company is no longer closely monitored by the State Securities Commission (SSC) and HoSE. As a result:

  • Company information often becomes less transparent.
  • Financial reports and business performance updates may not be disclosed periodically or may be delayed.
  • Shareholders face difficulties in assessing the company’s actual situation, leading to higher risks in holding shares.

3.2. On the Market

Impact on investor confidence

  • The delisting of ITA—a stock previously part of the large-cap VN30 index—sets a negative precedent in the market, causing investors to question the transparency and reliability of other listed companies.
  • Retail investors are particularly affected as they fear similar risks may occur with other companies, leading to more cautious market participation.

Negative impact on businesses in the same industry

  • ITA operates in the industrial real estate sector, which is highly competitive and heavily reliant on investor trust.
  • The delisting of ITA may cause investors to undervalue other companies in the same industry, even those performing well.

Contribution to reduced market liquidity
The delisting of a stock not only affects its own liquidity but also creates a ripple effect across the market:

  • Investors reduce trading due to concerns about the transparency of other stocks.
  • Overall market liquidity, particularly for small-cap stocks or related sectors, declines.
  • This reduces the attractiveness of Vietnam’s stock market to both domestic and foreign investors.

4. Lessons for Investors

4.1. Identifying Risk Indicators

  • Monitor company information closely: Pay attention to delays or lack of transparency in disclosures.
  • Analyze financial reports: Look for unusual indicators, audit exceptions, or cash flows that do not align with profits.
  • Identify unusual changes: Watch for changes in senior management, business models, or negative rumors.

4.2. Strategies to Protect Interests

  • Diversify portfolios: Minimize risks by investing in multiple sectors and stocks.
  • Exit strategy: Set stop-loss levels and be prepared to sell at signs of irregularities, avoiding holding stocks out of “recovery” sentiment.
  • Join shareholder groups: Collaborate to monitor the company, participate in voting, and collectively protect rights when necessary.

5. Conclusion

The delisting of ITA shares is a costly lesson for both investors and companies regarding the importance of legal compliance and transparency in the stock market. This is also an opportunity for investors to draw valuable experience in evaluating and managing investment risks.

Harley Miller Law Firm “HMLF”

  • Address: 14th floor, HM Town Building, 412 Nguyen Thi Minh Khai, Ward 05, District 3, Ho Chi Minh City.
  • Phone: +84 937215585
  • Website: hmlf.vn
  • Email: [email protected]
1 Comments
  • Posted by Vicia 06/02/2025 at 10:50

    "Bài viết này cung cấp một cái nhìn sâu sắc về việc hủy niêm yết cổ phiếu ITA và những bài học quý giá cho nhà đầu tư. Việc nắm vững các yếu tố tác động đến quyết định hủy niêm yết sẽ giúp nhà đầu tư tránh rủi ro. Những phân tích về thị trường chứng khoán và các động thái của công ty rất hữu ích. Đây là một bài viết cần thiết cho những ai đang tham gia đầu tư chứng khoán.

    Reply

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