The Role of Former CEO Doan Van Phuong in FLC
The Criminal Investigation Agency (C01) of the Ministry of Public Security has recently issued additional investigation findings and proposed the prosecution of Mr. Trinh Van Quyet (Chairman of FLC Group) on charges of “Stock Market Manipulation” and “Fraudulent Appropriation of Assets.”
 The investigation has determined that the suspect Doan Van Phuong has been on the run since 2022. |
In contrast to the previous investigation findings, in this supplementary report, C01 has proposed the prosecution of 51 suspects, including 7 officials and officers of the Ho Chi Minh City Stock Exchange (HOSE), the State Securities Commission, and the Vietnam Securities Depository Center.
At FLC Group, Faros Construction Joint Stock Company, and related companies, C01 has clarified the criminal acts of each suspect, except for Doan Van Phuong (born in 1977, former CEO of FLC Group) who has fled the country since March 2022.
According to the investigation, in the case, Doan Van Phuong also held the position of Chairman of Faros Construction Joint Stock Company’s Board of Directors from 2012 to 2016, and then became a Board Member from November 2016 to June 2019.
As Chairman of the Faros Board of Directors, from May 28, 2015, to November 9, 2016, Phuong instructed the Board Members, the General Director, and employees of Faros to issue resolutions regarding the increase of charter capital, the preparation of fictitious capital contributions, and the registration of the company as a public company, registration with the depository center, and listing of 430 million shares equivalent to VND 4,300 billion of Faros’ charter capital.
This action by Phuong was intended for Trinh Van Quyet and his accomplices to sell shares formed from fake capital contributions, misappropriating over VND 3,620 billion of investors in the stock market.
In particular, regarding Phuong’s actions, the investigation concluded that the suspect had instructed and directly signed documents, minutes, and resolutions of the Board of Directors to set guidelines for fake capital increases (third, fourth, fifth) and guidelines for registering Faros’ shares on the stock exchange.
As Chairman of the Faros Board of Directors, Phuong also directly participated in signing fake documents to legitimate accounting for fake capital contributions. This includes signing 18 cash withdrawal slips for suspect Trinh Thi Minh Hue (sister of Trinh Van Quyet) to withdraw VND 900 billion of contributed capital from Faros’ account, signing 12 letters of authorization for Hue to transfer VND 296.5 billion from FLC Investment and Development Joint Stock Company’s account to various individuals’ accounts to create cash flow, form fake debts for legitimate accounting in financial records and financial reports.
 Mr. Trinh Van Quyet.
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Benefiting from 500,000 shares
In addition, the suspect also signed documents to compile a dossier to be submitted to the Public Company Supervision Department for the registration of a public company, to request the Depository Center to register and keep securities, and to request HOSE to approve the listing of the company’s shares at an incorrect nominal value.
In his personal capacity, Doan Van Phuong signed a contract on May 19, 2015, with the content: “Receive the transfer of 675,000 shares of Nguyen Van Manh in Faros Construction Joint Stock Company without any payment made to become a contributing shareholder.”
After becoming a contributing shareholder, from May 27, 2015, to November 12, 2015, Phuong signed fake deposit documents and two fake authorization letters for Trinh Thi Minh Hue to use for payment procedures, money transfers, and fraudulently increase the fictitious capital contributions in the name of Doan Van Phuong in Faros from VND 675 million (equivalent to 675,000 shares) to over VND 77.6 billion (equivalent to 7,762,500 shares). Before listing, Phuong returned 7,762,500 shares to Trinh Van Quyet through a transfer contract without any payment made.
The investigation determined that the suspect Doan Van Phuong benefited from 500,000 shares with a total issuance value of VND 5 billion. On August 29, 2016, the suspect registered the shares under his personal securities account. In the years 2017-2018, the suspect received an additional 160,000 shares as dividends, increasing Phuong’s total ownership to 660,000 shares.
In mid-May 2020, Phuong sold all 660,000 shares using his securities account, earning over VND 2.3 billion.
As of now, despite conducting multiple investigations, Doan Van Phuong has not been found. The Criminal Investigation Agency of the Ministry of Public Security has separated the documents related to the crime of “Fraudulent Appropriation of Assets” by the suspect for further processing.
Hoang Cu
