Conclusion of the first-instance judgment of the Hanoi People’s Court dated November 24, 2022 for the case which occurred at the Ministry of Health related to the contract for Oseltamivir production in the 2006 – 2008 period is a disadvantage for the business of Cuu Long Pharmaceutical Joint Stock Company (VPC) at this time. However, the Board of Directors of the Company is still confident to overfulfill the business plan approved by the General Meeting of Shareholders.

On November 24, 2022, the Hanoi People’s Court issued a first-instance judgment for the case “Lack of responsibility, causing serious consequences; Abuse of positions and powers while performing official duties at the Ministry of Health, Cuu Long Pharmaceutical JSC and related units”. According to the first-instance judgment of the Hanoi People’s Court, Cuu Long Pharmaceutical Joint Stock Company is a legal entity ordered to pay the Ministry of Health an amount of VND 58,431,883,500 as compensation.

Regarding the above-mentioned conclusion, the Board of Directors of Cuu Long Pharmaceutical Joint Stock Company said that the judgment has and will affect the Company’s operations in terms of finance and psychology of employees, however, the Company still ensures the business growth goals in the long term.

Accordingly, the employees were confused and worried during the occurrence of the case. In addition, the decision requesting the Company to compensate over VND 58 billion will affect the financial plan and business targets of the Company in the context that 2022 is a year of great fluctuations, therefore, the enterprises are affected to a greater or less degree.

Mr. Luong Trong Hai – General Director of the company said: “In the spirit of respect for law, Cuu Long Pharmaceutical Joint Stock Company always proactively works with relevant authorities to ensure the evidence collection and judgement are in accordance with the law. The violations in the case had arisen from the 2006-2008 period, before the Company was fully restructured and all benefits were completely distributed from the previous period. Therefore, we shall perform necessary legal procedures to ensure the legitimate rights and interests of shareholders and the Company in the coming time”.

According to Mr. Hai, in addition to the issue directly related to the judgement, what Cuu Long Pharmaceutical Joint Stock Company is focusing on at this moment is stabilizing employees’ psychology and establishing and adjusting business plans.

As of the third quarter of 2022, the Company’s consolidated net revenue reached VND 670.71 billion, profit after tax reached VND 69,081 billion, which increased by 31.81% and 12.05%, respectively against the same period last year. It is estimated that in 2022, the Company can reach the milestone of VND 1,000 billion for the first time; pre-tax profit of over VND 136 billion and the Company is striving to reach the target of nearly VND 150 billion in pre-tax profit for the year 2022.

Business activities are well progressing, however, the final result may not meet the target since the Company has to make a provision for compensation of over VND 58 billion under the decision of the first instance judgment.

“The business strongly grows and may exceed the plan according to estimation, however, the profit results in the financial statements may not reach the target approved by the General Meeting of Shareholders, which is very unfortunate for Cuu Long Pharmaceutical Joint Stock Company in this year. However, the Company has been implementing comprehensive solutions so that officers and employees can feel secure in their work, in addition to developing action plans and programs in line with business and growth goals of the Company”, Mr. Hai added.

Also according to Mr. Hai, Cuu Long Pharmaceutical Joint Stock Company considers this fact as a challenge to be overcome in a short period, promoting the spirit of solidarity and difficulty overcoming to advance towards the big goal of becoming Vietnam’s leading prestigious pharmaceutical company which are most appreciated by patients and the community through the diversity of product categories, satisfaction of the needs of patients for product quality, broad distribution system, convenient access and care.