PE investors launch lawsuit against Huy Vietnam founder over alleged fraud

Photo courtesy: Huu Phuc

Private equity investors in Vietnamese F&B chain operator Huy Vietnam on Thursday said they have commenced a lawsuit in the People’s Court of Ho Chi Minh City on behalf of the business against its founder and chairman Huy Nhat.

“The actions against Huy and his associates, including Hanh Ngo, head of operations of Mon Hue (a brand under Huy Vietnam), 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 a joint statement.

ADV Partners, AIF Capital, F&H Fenghe, Fortress Investments, Gryphus Capital and Welkin Capital are members of the investor group.

The filing of these claims in Vietnam follows the investor group successfully obtaining asset freezing injunctions against Huy Vietnam founder in overseas jurisdictions, according to the statement.

Meanwhile, Huy Vietnam has shut down its outlets in Vietnam. Social media posts showed that food and services suppliers for the company are protesting over the billions of dong worth of debt owed to them.

Attempts by DealStreetAsia to reach Huy Vietnam management proved futile.

“Unauthorised large-scale closures of stores around Vietnam, for no apparent commercial reason, has resulted in more than 1,500 local Vietnamese unnecessarily losing their jobs,” the investor group alleged in their statement.

The investor group is seeking to restore the continuity of the business. “While the investor group is disappointed at the need to take these steps, it hopes for a swift and fair resolution in the Vietnamese courts, in line with the freezing injunctions already obtained overseas.”

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. The company then claimed it had over 70 restaurants across three dining concepts.

In total, international private equity firms put over $70 million in Huy Vietnam since 2013. Huy Vietnam Group Limited operated the Mon Hue, Pho Ong Hung, Com Tho Chay, Great Banh Mi, Pho 99 and TPTea brands.

Dennis Nguyen, the founder of New Asia Partners, left the firm in 2016, according to his LinkedIn profile. Founded in 2002 and headquartered in Minneapolis, US, New Asia Partners does not currently have a website.

It was also an early investor in café chain The KAfe, which collapsed after raising $5.5 million from Cassia Investments.

Singapore Reporter/s

In Singapore, we are looking to double our reporting team by this year-end to comprehensively cover the fast-moving world of funded startups and VC, PE & M&A deals. We want reporters who can tell our readers what is really happening in these sectors and why it matters to markets, companies and consumers. The ability to write precisely and urgently is crucial for these roles. Ideal candidates must have to ability to work in a collaborative, dynamic, and fast-changing environment. We want our new hires to be digitally savvy and ready to experiment with new forms of storytelling. Most importantly, we are looking for hard-hitting reporters who work well in a team. Collaboration and collegiality are a must.

Following vacancies can be applied for (only in Singapore).

Following vacancies can be applied for (only in Singapore).   

  • A reporter to track companies/startups that have raised private capital, and have the potential to become unicorns. SEA currently has over 40 companies with a valuation of over $100 million and under $1 billion.
  • A reporter who can get behind the scenes and reveal how funding rounds are put together, or why they’ve failed to materialise. She/he in this role will largely focus on long-format stories. 
  • A journalist to track special situations funds, distressed debt and private credit (from the PE angle) across Asia.

Singapore Reporter/s

In Singapore, we are looking to double our reporting team by this year-end to comprehensively cover the fast-moving world of funded startups and VC, PE & M&A deals. We want reporters who can tell our readers what is really happening in these sectors and why it matters to markets, companies and consumers. The ability to write precisely and urgently is crucial for these roles. Ideal candidates must have to ability to work in a collaborative, dynamic, and fast-changing environment. We want our new hires to be digitally savvy and ready to experiment with new forms of storytelling. Most importantly, we are looking for hard-hitting reporters who work well in a team. Collaboration and collegiality are a must.

Following vacancies can be applied for (only in Singapore).

Following vacancies can be applied for (only in Singapore).   

  • A reporter to track companies/startups that have raised private capital, and have the potential to become unicorns. SEA currently has over 40 companies with a valuation of over $100 million and under $1 billion.
  • A reporter who can get behind the scenes and reveal how funding rounds are put together, or why they’ve failed to materialise. She/he in this role will largely focus on long-format stories. 
  • A journalist to track special situations funds, distressed debt and private credit (from the PE angle) across Asia.