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- FLC Faros’ report clearly stated that before going public, the company continuously withdrew money as investment trust right after capital contribution.
- The company explained that the investment trust was in accordance with the pre-determined plan, with no risks involved, providing opportunities to approach new partners.
- The leaders of the State Securities Commission, and Ho Chi Minh City Stock Exchange noticed unusual signs from FLC Faros, but still approved the listing for this company.
FLC Faros – a company under the FLC ecosystem of Mr. Trinh Van Quyet was listed in August 2016.
The pre-listing report of FLC Faros stated that in the second half of December 2015 to early 2016, there were three shareholders who contributed capital to FLC Faros with a total value of nearly VND 463 billion. “These contributed capital amounts were later transferred through investment trust contracts. Corresponding to each incoming fund transfer, there was an outgoing fund transfer, continuously for 18 times. The incoming and outgoing fund transfers for the receiving party were all executed on the same day of January 8, 2016” – the report stated.
In the same report, FLC Faros stated that the investment trust was carried out in accordance with the pre-existing plan. The selected partners were reputable organizations and individuals with long-term relationships with the company, hence no risks were involved, with a high profit potential, and creating new business opportunities in the future…
In reality, this was not the only entrusted capital of FLC Faros during that time.
According to the audit financial report, as of the end of 2015, FLC Faros entrusted investment to organizations and individuals with an amount of over VND 3,300 billion. Some individuals on this list have been proposed for prosecution.
According to this report, FLC Faros has 14 individual shareholders with a total contributed capital of VND 3,037 billion, excluding Mr. Trinh Van Quyet. Some individuals on this list have also been proposed for prosecution.
The Conclusion of the investigation case at FLC Faros stated that after receiving the listing application file of the company, Mr. Tran Dac Sinh – who was then the Chairman of the Board of Directors of Ho Chi Minh City Stock Exchange (HoSE) – knew that the company’s report was not suitable due to a great emphasis, insufficient basis to determine the actual contributed capital.
Mr. Le Hai Tra (who was then a member of the Board of Directors and an independent member of the Listing Council of HoSE) – during the file appraisal process, had twice consulted and discussed with the Listing Council of HoSE, unanimously agreeing that FLC Faros did not meet the listing conditions, requesting the company to provide explanation.
FLC Faros’ explanatory report was sent on the morning of August 22, 2016, but by 11 a.m. on the same day, the Listing Council, with the participation of Mr. Le Hai Tra, came to the conclusion “agreeing with the explanatory contents” of FLC Faros, and at the same time, approved the company’s application and listing conditions.
According to the operating regulations of the Board of Directors and the Listing Council of HoSE, the approval of listing stocks does not fall under the authority of the Board of Directors. However, even when FLC Faros had not fully supplemented the required documents, on August 16, 2016, Mr. Tran Dac Sinh had instructed to require the Listing Council to report the appraisal results at the meeting on August 23 – just one day after FLC Faros submitted the explanatory report.
Prior to that, Mr. Sinh also repeatedly directed Mr. Le Hai Tra and the members of the Listing Council to create favorable conditions for early listing of FLC Faros’ stocks.
