ITA (Tan Tao) Faces VND 127B Tax Debt and Trading Suspension

Overview

Tan Tao Investment & Industrial Joint Stock Company (ITA) has been identified as the top tax debtor in Binh Tan district, Ho Chi Minh City, with arrears of nearly VND 127 billion. Concurrently, the company’s stock is under trading restrictions on the Ho Chi Minh City Stock Exchange (HoSE) due to delayed submission of audited financial reports, escalating regulatory and financial pressures.

Key Facts

• ITA’s tax debt totals nearly VND 127 billion, making it the largest debtor among 231 individuals and enterprises listed by Binh Tan District Tax Department as of November 15.
• Total tax arrears in Binh Tan district amount to VND 542.3 billion.
• ITA’s stock was moved from restricted to suspended trading on September 26, then placed under control from October 26, due to failure to file reviewed semi-annual financial statements for 2024.
• The company reported contacting 30 audit firms, all of which declined to engage, citing regulatory suspensions of four auditors who previously worked with ITA.
• In Q2 2024, ITA recorded revenue of VND 70.8 billion and net profit of VND 44 billion, up 84% year-on-year, though gross profit fell 25%.
• Total capital as of June 30, 2024, stood at VND 12,244 billion.
• Chairman of the Board is Đặng Thị Hoàng Yến (also known as Maya Dangelas).

What Happened

The Binh Tan District Tax Department, under the Ho Chi Minh City Tax Department, publicly disclosed a list of 231 tax debtors as of November 15, with ITA leading owing nearly VND 127 billion. This disclosure follows ongoing regulatory actions by the Ho Chi Minh City Stock Exchange (HoSE) against ITA for delayed financial reporting. In late August, ITA requested a postponement for filing its audited 2023 financial statements, 2023 annual report, and reviewed semi-annual 2024 financial statements, citing force majeure. After a warning in early September, HoSE suspended ITA’s trading on September 26 and later placed it under control from October 26 due to continued non-compliance.

ITA explained in filings that it contacted 30 audit firms approved for public-interest entities in securities, but all refused. The company attributes this to the State Securities Commission’s suspension of four auditors who handled its 2021, 2022, and reviewed semi-annual 2023 statements, creating reluctance among other firms. ITA also cited impacts from a 2018 bankruptcy proceeding initiated by the Ho Chi Minh City People’s Court, which it claims has hindered bank lending and investor negotiations for land and factory leases.

Market Context

ITA trades on the Ho Chi Minh City Stock Exchange (HoSE) under the industrial real estate sector. The stock has faced significant volatility, with trading suspended since September 26 and under control from October 26 due to reporting delays. This regulatory action compounds investor concerns amid the tax debt disclosure, potentially affecting liquidity and market confidence. The broader Vietnamese market has seen increased scrutiny on corporate governance and compliance, particularly for firms with public-interest exposure.

Strategic Significance

The VND 127 billion tax debt and reporting delays highlight severe liquidity and operational challenges for ITA, which focuses on industrial park development and real estate. The inability to secure auditors points to deeper regulatory and reputational risks, possibly deterring future partnerships or financing. For long-term investors, this situation underscores the importance of monitoring ITA’s resolution of tax obligations and audit issues, as failure could lead to further penalties or impact its ability to execute projects in a capital-intensive sector.

What to Watch

• Resolution of the VND 127 billion tax debt with Binh Tan District Tax Department.
• Submission of overdue audited financial reports for 2023 and reviewed statements for 2024.
• Announcement of a new audit firm engagement to address regulatory requirements.
• Updates on the 2018 bankruptcy proceeding’s impact on operations and financing.
• Potential lifting of HoSE trading restrictions upon compliance with reporting deadlines.