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.