Trung Nguyen dispute remains unsettled

As VET reported previously, on July 13 the Binh Duong Department of Planning and Investment released a decision removing Vu as the legal representative at Trung Nguyen Instant Coffee, which owns G7 coffee.

The business license with a seal bearing Vu’s name was canceled and the previous business license, granted in November 2013 and bearing the name of Thao was restored.

Vu then lodged a lawsuit with the Binh Duong People’s Court seeking cancellation of the Department’s decision, which was accepted. 

Judge Tran Thi Nhan then signed Decision No. 01/2016 on July 22 staying the Department’s decision.

Thao sent a number of letters of complaint to the court, saying the cancellation of Vu as legal representative and restoring representation to her is an internal matter for the company and has no negative impact on the company’s business.

Her claims, however, were not accepted by the court and Vu remains the legal representative of Trung Nguyen Instant Coffee.

The dispute arose last year when it was announced that the company’s instant coffee supplies were being suspended due to machinery maintenance. Ms. Thao, however, sent documents to partners and authorities revealing that the suspension was primarily due to a dispute between her and her husband.

According to Thao, while waiting for the divorce court’s final decision Vu arbitrarily dismissed her as Chairwoman of the Board and CEO at Trung Nguyen Instant Coffee. She said the dismissal had no legal basis because the company’s board has three members but Vu made the decision unilaterally.

Under Article 13 of the Law on Enterprises, the legal representative of a company is its Chair or General Manager and is authorized to represent the company and make important decisions on business operations, human resources, bank accounts, and the company seal.

Trung Nguyen Corporation is involved in coffee production, processing and distribution, operating under the brand name Trung Nguyen Coffee and is one of the leading coffee brands in Vietnam. Its products have been exported to more than 60 countries around the world, including the US, the UK, China, Singapore, and the EU.

Along with the Binh Duong Instant Coffee Plant operated by Trung Nguyen Instant Coffee, the corporation also has factories in Ho Chi Minh City, Bac Giang province and Dak Lak province. It operates a nationwide chain of coffee shops and has granted franchises in other countries.

The instant coffee business brings in a great deal of revenue to the Trung Nguyen Corporation. According to figures from Euromonitor, in 2015 its G7 instant coffee recorded revenue of VND245 billion (US$10.8 million) and was one of the three leading instant coffee brands in Vietnam.

The share of instant coffee in Vietnam’s coffee market has increased dramatically over the last five years, from 1.8% to 9.1%.