Phuc Son Company still owes tens of thousands of billions of dong in taxes.

Báo Đại Đoàn Kết•02/03/2024

On the afternoon of March 2nd, at the regular monthly government press conference for February, regarding the investigation results of the Tan Hoang Minh and FLC cases; solutions for a healthy stock market? as well as information on the investigation of Phuc Son Group Joint Stock Company, which was recently prosecuted?, Lieutenant General To An Xo, Spokesperson of the Ministry of Public Security , stated that through the FLC and Tan Hoang Minh cases, the Ministry of Public Security has sounded the alarm about the phenomenon of manipulating the stock and bond markets. The investigating agency has concluded its investigation, the Procuratorate has announced the indictment, and the case will soon be brought to trial.

Clearly identify Trinh Van Quyet's market manipulation activities.

According to Mr. Xo: Through the investigation process, the investigating agency discovered that FLC's manipulation of the stock market was manifested through two acts. Firstly, fraud and misappropriation of assets when the defendant Trinh Van Quyet directed the creation and signing of fictitious capital contribution documents at FLC FAROS Construction Joint Stock Company, inflating the capital by 3102 billion VND, increasing it from 1.5 billion to 4300 billion VND. The documents were then legalized to obtain approval from the state securities management agency. From there, fraudulent acts were carried out to misappropriate 3620 billion VND.

Secondly, regarding stock market manipulation, Quyết instructed the use of personal documents from 400 family members to create 20 fictitious companies that were not engaged in business activities. Using these entities as legal names, he opened 500 securities accounts to carry out stock market manipulation. The manipulation tactics included continuously buying and selling the same type of security, conducting intra-group trading to avoid actual ownership transfers, placing numerous buy and sell orders to control the market at opening and closing times, and placing buy and sell orders and then canceling them to create artificial supply and demand, luring investors to buy.

During the period from May 26, 2017 to January 10, 2022, this group used 190 accounts to manipulate the market and illegally profit 723 billion VND.

“The investigating agency found six causes. Accordingly, there were loopholes and shortcomings in state management, and some regulations related to the law such as: functional agencies lacked inspection, supervision, and control over the contribution of charter capital to enterprises and organizations; individuals made declarations without inspection or supervision, leading to fictitious declarations followed by the legalization of documents. There was a lack of control over account opening, with securities accounts easily opened by others using their names to open multiple accounts and conduct manipulation activities. The penalties are still light and not strong enough to deter violators. Regulations on state management regarding quality control and auditing services and personal responsibility in these positions are not specific and are still lax. There was a lack of control over social media activities when some individuals exploited private groups to solicit and attract investors, control and manipulate,” Mr. Xo stated, adding that the authorities are “patching” and “plugging” these loopholes. Hopefully, the stock market will develop healthily in the future.

Mr. Xô also stated that, from these cases, the police are sending a message to stock market investors: "You should not exploit loopholes to manipulate the stock market. Anyone or any organization that continues to manipulate the stock market will certainly be invited by the investigating agency to 'live in a confined space' so that the stock market can function healthily."

Phuc Son has won bids for many large projects since 2015.

Regarding the case of Phuc Son Group Joint Stock Company, according to Mr. Xo: This company has been operating since 2004, initially in construction at the district level. However, since 2015, the company has rapidly expanded, securing numerous projects from North to South Vietnam.

To date, the company has 21 projects with a total investment of over 40 trillion VND. Investigators have only examined two projects and found that the company kept them off the books, failing to declare them in the financial system to evade taxes, causing losses to the state budget of over 640 billion VND. Currently, the company still owes tens of thousands of billions of VND in taxes. Many real estate projects were not yet eligible for sale or market entry, but the company sold them and collected money without handing over the land to investors, causing losses of tens of thousands of billions of VND to the people.

Mr. Xô added that, initially, the responsibility lies with the regulatory agencies for failing to control the company's financial reporting activities and lacking oversight from specialized agencies.

Despite failing to fulfill their tax obligations, these companies continue to operate. Furthermore, there's a lack of understanding of the company's actual capabilities when undertaking projects. For example, this company, initially a small district-level enterprise, has expanded its reach, winning bids for projects worth tens of thousands of billions of dong, despite its modest capabilities. Many powerful corporations don't receive such large projects. Even the company's Deputy General Director only completed the fourth grade.

"Overcoming poverty through hardship is commendable, but poverty-stricken individuals striving to become wealthy must not infringe upon the legitimate rights and interests of the people and the state. Currently, the investigative agency is expanding its investigation to clarify the matter and prosecute the right people for the right crimes, recovering assets for the state and the people," Mr. Xô said.

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