Foreign investors sue Mon Hue founder

The group of investors has filed a lawsuit with the HCMC People’s Court against Huy Nhat, founder of Mon Hue’s parent company, Huy Vietnam Food Processing JSC, over the recent closing of 80 outlets nationwide.

They said that Huy Nhat, an American-Vietnamese, has violated his managerial obligations and responsibilities by conducting unusual transactions with evidence of fraud.

The group comprises foreign investment funds ADV Partners, AIF Capital, F&H Fenghe, Fortress Investments, Gryphus Capital and Welkin Capital. Together, they have poured $70 million into Huy Vietnam since 2013.

A representative of the group told VnExpress that they have successfully requested an order to block Huy Nhat’s overseas accounts.

In the lawsuit, the investors said they had not approved the closing of Mon Hue outlets, which happened without an apparent business reason and cost 1,500 Vietnamese employees their jobs.

The litigants said that although they were "very disappointed to conduct these proceedings," they hoped to be able to resolve the lawsuit quickly and fairly in Vietnamese courts.

Meanwhile, the HCMC Tax Department said Thursday that it had blocked Mon Hue’s domestic account because of unpaid taxes.

Deputy head of the department, Le Duy Minh, said unpaid tax in the third quarter ran into hundreds of millions of dong (VND100 million = $4,300).

The crisis with Mon Hue outlets and its parent company Huy Vietnam came to the fore last Monday, when dozens of suppliers picketed the headquarters of the company in HCMC, claiming they had not been paid tens of billions of dong (VND1 billion = $43,000).

But the office was deserted and its leaders were unreachable.

As of last year, Mon Hue suffered an accumulated loss of almost VND107 billion ($4.62 million) since 2016.

In April, Huy Vietnam’s charter capital was cut by half to VND600 billion ($25.91 million), while capital in Mon Hue surged 30 times to VND657 billion ($28.37 million).