On the afternoon of March 2, at the regular Government press conference, a reporter asked the representative of the Ministry of Public Security for more information about the investigation results of the Tan Hoang Minh and FLC cases up to now.
In response to this question, Lieutenant General To An Xo, the spokesman of the Ministry of Public Security, said that through the FLC and Tan Hoang Minh cases, the Ministry of Public Security has raised the alarm about the phenomenon of market manipulation in the stock and bond markets.
Lieutenant General To An Xo, spokesperson of the Ministry of Public Security. Photo: Như Ý
The media has mentioned these two cases a lot, the investigative agencies have concluded the investigation, the Office of the Prosecutor General has issued indictments, and the court will soon hold trials in these cases.
“The main question is how to ensure the healthy operation of the stock market,” Mr. Xo said, pointing out that during the investigation process, the investigative agencies discovered the market manipulation activities of FLC, manifested through two acts.
The first act is fraud and misappropriation of assets. Mr. Trinh Van Quyet gave instructions to create and forge contribution documents at FLC Faros Construction Joint Stock Company, inflating the capital from 1.5 trillion VND to 4.3 trillion VND. Later, he legalized the documents to get the Securities and Exchange Commission to accept the registration of the signatures, thereby committing fraud and misappropriating 3.62 trillion VND.
The second act, according to Mr. Xo, is market manipulation. Specifically, Mr. Quyet instructed and used personal documents of 45 family members to create 20 fake companies that did not engage in business, using legal entities to open 500 securities accounts to manipulate the stock market.
The manipulative method is to continuously buy and sell the same type of securities, place multiple buy and sell orders to control the market at the opening and closing times; place buy and sell orders and then cancel them to create fake supply and demand and “lure” investors to follow suit…
According to the spokesman of the Ministry of Public Security, from May 26, 2017, to January 10, 2022, this group used 190 accounts to manipulate the market, illegally profiting 723 billion VND.
“During the investigation, the investigative agencies found out why this incident happened. It is clear that there were gaps and shortcomings in state management,” Mr. Xo said.
The representative of the Ministry of Public Security cited evidence: first, the functional agencies failed to inspect, supervise, and control the charter capital contribution activities of companies, so no one checked or supervised the manipulation, leading to the false declaration.
Second, there was a lack of control over the opening of securities accounts. It was easy to open securities accounts through others’ names and open multiple accounts.
Third, the punishment measures were still lenient and not deterrent enough for violators.
Fourth, state regulations on quality control and audit services, personal responsibilities in these positions are still not specific, still loose.
Fifth, there was a lack of control over social media. Some individuals took advantage of closed groups to lure and manipulate investors.
Sixth, there were no regulations or guidelines as a basis for determining the losses for investors involved in the manipulated stock market.
“The investigative agencies have drawn six causes from this incident, and from this lesson, the functional agencies have coordinated to fill the gaps. It is hoped that in the future, the stock market will develop healthily and better,” Mr. Xo said.
At the press conference, the police agency also sent a message to stock investors that “they should not take advantage of vulnerabilities to manipulate the stock market.”
“If any individual or organization continues to manipulate the stock market, the investigative agencies will certainly invite them to spend time in a confined space to ensure the healthy operation of the stock market,” General To An Xo said.
Regarding the incident related to the Phuc Son company, Lieutenant General To An Xo said that the case was filed in February 2024. According to the initial information provided by the investigative agencies, Phuc Son Company has been operating since 2004, it is a medium-sized construction company at the district level. However, since 2015, it has grown very strongly, receiving many projects from the North to the South. Up to now, this company has 21 projects with a total investment of over 40,000 billion VND.
The investigative agencies initially examined 2 projects in Vinh Phuc and found that the company had not declared its finances, evaded taxes, causing damage to the state of over 640 billion VND. Currently, this company still owes tens of thousands of billion VND of tax money.
“Many real estate projects did not meet the conditions for sale or entry into the market, but they were sold, received money but did not deliver the land to investors, causing damage to the people of tens of thousands of billion VND, causing a lot of instability for investors and people,” Mr. Xo said.
According to him, through this incident, it can be seen that the management agencies did not control the financial declaration activities of this company. Although the companies did not fully fulfill their financial and tax obligations, they were still allowed to operate, without grasping the reality of the enterprises when they received the projects…
According to the report, the deputy general director of this company had just finished studying in grade 4. “Here, it needs to be seen that if there is education and overcoming difficulties to rise, it should be encouraged, but it should not affect the legitimate interests of the people and the state,” Mr. Xo said, emphasizing that the investigative agencies are concentrating on investigating and expanding the investigation to ensure the correct handling of the right offenders.
