Identity of the group of securities officials prosecuted
The Investigation Police Agency (C01) of the Ministry of Public Security has just issued a supplementary investigation conclusion, proposing to prosecute 4 defendants who are leaders of the Ho Chi Minh City Stock Exchange (Hose) for the crime of "Abusing position and power while performing official duties", including: Tran Dac Sinh (former Chairman of the Board of Directors of the Stock Exchange); Le Hai Tra (former member of the Board of Directors, General Director, independent member of the Listing Council); Tram Tuan Vu (former Deputy General Director, Deputy Chairman of the Listing Council) and Le Thi Tuyet Hang (Director of the Listing Management and Appraisal Department, member of the Listing Council).
In addition, the investigation agency also proposed to prosecute Mr. Le Cong Dien (Director of the Department of Supervision of Public Companies under the State Securities Commission); Duong Van Thanh (General Director of the Vietnam Securities Depository Center); Pham Minh Trung (Head of the Securities Registration Department under the Vietnam Securities Depository Center) for the crime of "Disclosing false information or concealing information in securities activities".
The violations of the above group of officials were determined to be related to the acts of "Stock market manipulation" and "Fraudulent appropriation of property" of Mr. Trinh Van Quyet (former Chairman of FLC Group) and his accomplices.
Defendant Tran Dac Sinh.
Specifically, in the act of "Stock market manipulation", from mid-2017 to early 2022, Trinh Van Quyet directed his sister Trinh Thi Minh Hue, and accomplices... to open securities accounts and bank accounts to use to manipulate the stock market for 5 stock codes AMD, HAI, GAB, FLC, ART, illegally profiting over 723 billion VND.
Regarding the act of "Fraudulent appropriation of property", the investigation agency accused that from 2014 to 2016, Trinh Van Quyet directed individuals who were leaders and employees of Faros Company, companies under FLC Group; relatives and family members to act as shareholders contributing capital, to carry out tricks to create and sign fake capital contribution documents, to inflate the capital contribution to Faros Company by more than 3,102 billion VND, increasing the Company's charter capital from 1.5 billion VND to 4,300 billion VND.
After that, the defendants created a dossier, requested the State securities management agencies to approve the registration of a public company, register securities depository and list 430 million shares formed from the fake capital contribution of Faros Company at the Ho Chi Minh City Stock Exchange, then sold 391 million shares for 4,818 billion VND, in which the investigation agency determined that Mr. Quyet's group appropriated more than 3,620 billion VND from investors in the stock market.
Defendant Le Hai Tra.
HOSE leaders help because of previous relationships
In additional investigation, C01 determined that after receiving the application for listing of Faros' shares, defendant Tran Dac Sinh, in his role as Chairman of the Board of Directors of HOSE, knew that the audited financial reports of 2014 and 2015 of this enterprise were "inappropriate; there was not enough basis to determine the actual contributed capital". However, due to personal relationships and many times being helped by Mr. Quyet and Doan Van Phuong (former General Director of FLC Group who is on the run), Mr. Sinh supported Faros to be listed.
Along with that, Mr. Sinh also directly directed his subordinates Le Hai Tra, Tram Tuan Vu and Le Thi Thanh Hang many times to create the earliest conditions for Faros.
According to the HOSE operating regulations, the appraisal and approval of stock listing is not under the authority of the Board of Directors. However, in August 2016, when Faros had not yet completed the documents, Mr. Sinh directed the HOSE Board of Directors Office to issue a notice requesting the Listing Council to report on the appraisal results.
Defendant Trinh Van Quyet.
The HOSE Board of Directors, including Mr. Sinh, approved the listing and signed a resolution stating: "Faros's profile meets all listing conditions." From then on, the Faros stock code was approved for listing, with a par value of VND10,000/share.
When assessing Faros's listing registration dossier, Mr. Le Hai Tra clearly knew that the financial audit report had "violations" because there was no basis to determine the actual contributed capital; and he also consulted twice with the members of the Listing Council and agreed that the conditions were not met, requiring the company to explain. However, when receiving Faros's explanation report, Mr. Tra and the members of the Listing Council did not study it but immediately agreed.
At the investigation agency, Mr. Tra confessed to having a "relationship" with Mr. Quyet and the group of subordinates of the FLC Chairman. Approval of listing helps Faros attract capital from investors in the market and HOSE has revenue from listing fees and securities transaction fees, thereby enhancing its own reputation.
In his role as Director of the Public Company Supervision Department, when examining Faros's dossier, he discovered that there was insufficient basis to determine the capital contribution. However, the defendant Le Cong Dien did not check but signed the document approving the registration dossier and then announced it in the media. Faros was successfully listed with a charter capital of 4,300 billion VND.
Mr. Dien's testimony showed that because Faros is a large company, Mr. Quyet has many relationships with leaders at all levels, and has a company specializing in legal consulting, so he was afraid.
During the assessment, Mr. Dien requested additional evidence but was twice complained by Faros for exceeding his authority and causing difficulties for the business. Because of fear of affecting his work, Mr. Dien knew it was wrong but still did it.
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