The People’s Court of Dong Nai Province in southern Vietnam has issued a decision to begin bankruptcy proceedings against LDG Investment Joint Stock Company, which was previously found building nearly 500 houses unlawfully in the province, an official said on Thursday.

Creditors of the firm must contact the provincial People’s Court for information about those trustees and enterprises charged with asset liquidation to send proof of debt within 30 days since the decision was issued, the court said.

After the 30-day period, if such creditors fail to send the proof of debt to the court, this means they give up the rights of collecting any debt.

Judge Nguyen Trung Hung is responsible for the bankruptcy proceedings against LDG, located in Giang Dien Commune, Trang Bom District, Dong Nai Province.

Phuc Thuan Phat Trading and Construction JSC, headquartered in District 12, Ho Chi Minh City, had previously sent a request to the provincial court, asking for bankruptcy proceedings against LDG.

The court issued the decision after carefully considering the relevant documents that proved the firm might face insolvency.

LDG executed the Tan Thinh residential area project in Trang Bom District, where approximately 500 houses were constructed illegally.

In late November 2023, Dong Nai investigators filed charges against Nguyen Khanh Hung, 45, the former chairman of LDG, for his alleged involvement in cheating customers.

Facing similar charges, Nguyen Quoc Vy Liem, 45, the former deputy general director of LDG, was detained for investigation in April this year.

In March last year, the Dong Nai People’s Committee issued the conclusion of a probe into the Tan Thinh residential area project in Trang Bom District, which was approved for investment in 2016.

As of October 2020, the investor had yet to convert part of the land designated for the project, which was originally for rubber tree planting, into residential land and had not finished paying compensation to the land owners.

However, LDG nearly completed the construction of 488 houses on the land.

During the probe into the project, the firm was discovered having signed house purchase agreements with 60 customers with a total value of over VND132 billion (US$5.2 million).

These customers paid the firm between 25 and 95 percent of the contract value, with seven households already moving into the dwellings.

More than 20 individuals and 13 organizations were found to be involved in the violations at the project.

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