Shares of Hoang Anh Gia Lai Group (HAGL) dropped sharply May 14 after an NGO accused the firm of land grabbing of in Laos and Cambodia.
Hoang Anh Gia Lai Group Chairman Doan Nguyen Duc
The fall in share prices, which also caused VND436.25 billion (USD20.83 million) in losses for the company's chairman, Doan Nguyen Duc, was a result of a report published by Global Witness on May 13. The report was entitled, "Rubber Barons: How Vietnamese companies and international financiers are driving a land grabbing crisis in Cambodia and Laos."
According to the report, privately-owned HAGL Group and state-owned Vietnam Rubber Group (VRG) acquired more than 200,000 hectares of land through a series of deals with the Lao and Cambodian governments that lacked transparency. The report also said that the deal was backed by several international financiers, resulting in widespread devastation to the environment and livelihoods of locals.
Land was often sold without residents' consent or even their knowledge and without compensation. Families were forced off their land or expected to work for the rubber plantation, although jobs were few and far between, the report alleged.
After news of the accusation spread in Vietnam, Hoang Anh Gia Lai shares fell by around 6% to VND21,400 on Tuesday morning. The group’s chairman, Doan Nguyen Duc, lost VND436.25 billion on over 311.6 million shares, nearly half the company’s stock.
Global Witness has even proposed that the Lao and Cambodian governments to stop HAGL’s activities in their countries, hold investigations and prosecute any illegal activities.
HAGL has turned to rubber, hydropower and sugarcane projects after withdrawing investment from real estate.
HAGL has released an announcement to refute Global Witness’s accusations.
“This may be an attempt by Global Witness to promote themselves and attract donations by aiming their attacks at HAGL. A number of other countries are also investing in this area, but they have picked us because we have done the best," Duc stated.
"The biggest disadvantage for us is the misleading of our big shareholders. We are ready to cooperate but Global Witness did not provide specific evidence for us to respond to," Duc added.
