Brian Jeffrey
VNG Corporation, a major player in Vietnam’s tech sector, is experiencing scrutiny and regulatory challenges despite its past achievements.
Founded by Le Hong Minh, a prominent figure in the industry, VNG (formerly Vinagame) has been under his leadership as CEO for nearly twenty years. The company is well-known for its flagship products, which include the popular social networking platform Zalo, ZaloPay, and hit games like Vo Lam Truyen Ky.
In a reflective piece from late 2006 titled “I play and make online games,” Minh shared insights from his gaming career and the daring choices that led him to launch online game development under Vinagame in 2004, ultimately shaping VNG.
On September 6, 2024, VNG made an unforeseen announcement appointing Kelly Wong, the Vice President, as the new Acting CEO to maintain operational stability. The board will support Wong during this transition.
This shift did not mention the current status of Le Hong Minh, raising questions about his role in the company moving forward.
Le Hong Minh established VNG in 2004, starting with an initial capital of 15 billion VND. Over the years, VNG amassed hundreds of billions in capital, becoming Vietnam’s first technology unicorn with a peak valuation of over 2 billion USD.
After being listed on Upcom in early 2023, VNG’s stocks peaked at over 1.56 million VND in February, only to adjust to about 480,000 VND per share later. Today, the company’s market cap has decreased to approximately 13 trillion VND ($524.1 million), down from a high of 2.3 billion USD.
In his 2006 article, Minh outlined his evolution from a gaming fan to a tech innovator, overcoming public skepticism about online gaming. His passion for gaming fueled the creation of VNG, with the aim of using the internet to improve lives in Vietnam.
Over the past two decades, VNG has transformed into an international conglomerate with a workforce exceeding 4,000 employees worldwide. Before founding VNG, Minh (born 1977) earned a degree in finance and banking from Monash University in Australia and worked for PWC and VinaCapital.
A dedicated gamer from university days, Minh launched a gaming center that offered various business services. He later left VinaCapital to start VinaGame, introducing major titles, including “Vo Lam Truyen Ky” in 2004.
In late 2002, he represented Vietnam in the World Cyber Games, an experience that proved challenging despite its significance. In November 2004, VinaGame managed to secure a contract with KingSoft to release “Vo Lam Truyen Ky,” and within six months, the game attracted over 1 million members, leading to substantial profits and recognition for VinaGame.
In just two years, VinaGame emerged as Vietnam’s largest online gaming company, operating three titles with nearly 1,000 servers and hundreds of thousands of users. The company also rolled out hits like Gunny, PUBG, and League of Legends.
Building on the success of these games, VinaGame transitioned to become VNG in 2009 and expanded into sectors such as social networking, e-commerce, digital content, and electronic payments, achieving a valuation surpassing 1 billion USD in 2014. By 2019, VNG was valued at 2.2 billion USD by Singapore’s Temasek.
However, despite its gaming successes and the Zalo network, VNG now faces hurdles with different projects and compliance as a public entity.
In August 2024, VNG was fined 157.5 million VND by the State Securities Commission for failing to disclose important information. This included not revealing a board decision from September 2022 to use company assets as security for debts related to BigV Technology JSC, a significant shareholder represented legally by Le Hong Minh.
The company also did not submit timely financial statements or annual reports for 2023 and failed to fully disclose information about its CitiBank accounts linked to loans for BigV.
According to their mid-2024 financial report, VNG faced difficulties with its subsidiary investments, recording a 510 billion VND loss in Tiki Global. Furthermore, VNG has invested about 1,777 billion VND into Zion JSC (owner of ZaloPay) in the first half of 2024, raising its stake to nearly full ownership.
Regarding the withdrawal from its U.S. IPO filing, Minh indicated to Tech in Asia that investors are not yet prepared for Asian tech IPOs. Despite discussions with over 120 global investors in the past year, many remain cautious.
Additionally, Tech in Asia reported that VNG has encountered a slowdown in growth, with its fintech operations becoming an obstacle to profit expansion.
