A group comprising Chinese and Singapore-based investors has initiated legal action against Vietnamese entrepreneur Huy Nhat for alleged asset misappropriation to the tune of $25 million in the Ho Chi Minh City’s People Court, according to a statement from their lawyers.
Nhat is the founder of Huy Vietnam, which operates Vietnamese restaurant chain Mon Hue and several other brands.
YKVN Lawyers represents four overseas investors, including MF Holding Inc, Gifted Wisdom Limited, Harvest Investment Advisory Co Ltd and Fenghe Harvest Ltd.
According to the statement, Nhat had pitched a resort development project, Horizon Langco, in central Vietnam to the investors in 2018.
Nhat claimed the resort was being developed by his company, Horizon Vietnam, but it turned out to be a “bogus real estate project,” the statement said. The entrepreneur, the statement alleges, had told the investors that he had established a Singapore entity, Horizon Singapore, to finance the Vietnam project.
The four investors said they had disbursed a total of $25 million to the Singapore entity, but later found that the amount was withdrawn from the Vietnamese company’s account. A further investigation reportedly showed that the investors were never mentioned in Horizon Singapore’s business documents, they claimed.
The investor consortium was interested in the Vietnam market due to its investment potential, and the $25 million sum was seen as the first step in their long-term plan in the country, according to the statement.
In October 2019, a group of Huy Vietnam investors comprising ADV Partners, AIF Capital, F&H Fenghe, Fortress Investments, Gryphus Capital and Welkin Capital had filed a lawsuit against Nhat.
“The actions against Huy and his associates, including Hanh Ngo, head of operations of Mon Hue, relate to alleged breaches of fiduciary duty, irregular transactions and fraud, in which Huy has siphoned off large amounts of cash and assets,” the investors said in their October 2019 announcement.
By then, they said they had successfully obtained asset freezing injunctions against Nhat in overseas jurisdictions.
Hong Kong-based New Asia Partners, founded by overseas Vietnamese Dennis Nguyen, became Huy Vietnam’s first institutional investor. The Vietnamese company then received a $10-million Series B investment from investors including AIF Capital Asia and Fortress Capital Asset Management Sdn Bhd in 2014. A year later, Huy Vietnam bagged another $15-million Series C funding from Templeton Emerging Markets Group, Welkin Capital and Prosperous Alliance.
In total, international private equity firms had invested $70 million in Huy Vietnam since 2013.