Investors, who rushed to buy shares of Lilama Land recently, have been shocked as Lilama Corporation has denied the cooperation with Hanoi Land and responsibility for any share transactions on the black market before the date of Lilama Land establishment.
In mid April 2007, local newspapers all reported a breaking news about the cooperation of Lilama Corporation, a well known machinery installation corporation, and the Hanoi Real Estate Joint Stock Company (Hanoi Land). The cooperation between the two giants in their fields is hoped to create the No 1 real estate group in Vietnam, which is capable to compete with the world’s biggest groups.
Le Trung Kien, Chairman of Hanoi Land said in interviews given to the press that right at the establishment, the new entity would undertake 10 big investment projects, including one worth $1bil. Mr Kien stated that Lilama Land will only target huge projects capitalized at several hundred million dollars or higher.
The information has, immediately, stirred up the market. Members of Vietstock forum, a securities website, called Lilama Land the ‘dinosaur’ in the field of real estate development, meaning that it would be a giant in the field. They thought that the offered VND18-20,000/share were considered ‘soft’ prices (just 1.8-2 times higher than the face value).
When asked what he expected when buying Lilama Land’s shares, an investor said that he hoped to gain the profit of 200-300% by the end of this year.
The problem lied in the fact that the ‘right to buy shares’ they got in the deals were just the written papers which showed the volume of shares they owned. They were told that the shareholders’ books will only be given in one or two months.
Investors have been exceedingly astonished as they could not find out where the headquarters of Hanoi Land as. A member named “khong_ban_lo’ on Vietstock wrote on May 11 that when he came to Lilama headquarter at No 124 Minh Khai street in Hanoi to ask about the procedures to buy Lilama Land’s shares, he was told that there has been no official announcement about the selling of Lilama Land’s shares.
A staff from Lilama gave him the card of Le Trung Kien, saying that this was the Chairman of Hanoi Land. When he came to No 302 Lac Trung, provided on the card, he found out that it was the branch of chemical and fertilizer company (PVFCCo). He called Mr Kien at the given cellphone number, but no one answered the phone.
He then checked at www.hapi.gov.vn, the website run by the Hanoi Planning and Investment Development and found out that Hanoi Land has another chairman, a Mr Nhon, and it is located somewhere in Thanh Cong residential quarter.
Lilama Vietnam has made a report to the Ministry of Construction and A17 Agency under the Ministry of Public Security on the sale of the right to buy Lilama Land’s shares.
In fact, Lilama, in its strategy to become a multi-funtional economic group, is planning to set up several new joint stock companies, including Lilama Land.
Lilama has heard that in the last several months, several institutions and individuals have invited investors to make capital contributions to Lilama Land. However, in fact, only on May 17, Lilama’s management board made the decision on setting up Lilama Land, the founding shareholders of which include Lilama, Vinataba (tobacco), Habeco (brewery), VNCC (construction consultancy), Tan Long (real estate), and Duc Giang Garment Co.
The list of the shareholders did not contain Hanoi Land. Lilama has announced that it would not take responsibility for any transactions relating to Lilama Land’s shares conducted before the official establishment of Lilama Land.
Source: VNE
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