Mr. Do Anh Dung, Chairman of Tan Hoang Minh Group before being arrested
Serious violation by auditors
Expected on March 19, the Hanoi People’s Court of First Instance will hear the case of the accused Do Anh Dung (Chairman of Tan Hoang Minh Group) and 14 accomplices on charges of “fraudulent appropriation of assets”.
The case originated from the difficulties in business activities. To have funds for expenses and payment of company debts, Mr. Do Anh Dung directed his subordinates to find a solution to raise capital by issuing bonds for investors.
The issuance of bonds was subsequently carried out by 3 companies, including: Ngoi Sao Viet, Soleil, and Cung dien Mua Dong, all of which were established or acquired by Do Anh Dung.
In order to issue bonds, the subordinates of Mr. Dung “colluded” with individuals in the legitimate audit firm to report the financial statements; at the same time, they coordinated procedures with the provider of valuation appraisal, issuance advisory, and bond asset management.
Specifically, on June 8, 2021, the two accused Nguyen Manh Hung (representative of Ngoi Sao Viet Company) and Tran Hong Son (representative of Soleil Company) signed contracts with the accused Bui Thi Ngoc Lan (Director of Nam Viet Audit Company – Northern Branch) with the contents: “Audit separate financial statements and consolidated financial statements for the year 2020 of Ngoi Sao Viet Company, Soleil Company”. The value of each contract is 121 million dong.
Bui Thi Ngoc Lan then assigned Tran Thi Linh, Head of the Audit Team of Ngoi Sao Viet Company and Nguyen Thi Nguyen Nhung, Head of the Audit Team of Soleil Company, together with the audit assistants, to carry out the task.
The prosecutor’s office believes that Bui Thi Ngoc Lan, in charge of 2 audits, did not comply with the provisions of the Vietnamese audit standards, many main items were not tested or lacked evidence, but still signed the issuance of Independent Audit Report No. 216/2021 and No. 219/2021, with the opinion “fully accepted with the Financial Statements of Soleil and Ngoi Sao Viet”.
At Cung Dien Mua Dong Company, also in June 2021, the accused Nguyen Khoa Duc (Director of the company) signed an audit contract No. 44/2021 with the accused Le Van Do (representative of Hanoi CPA Company) to audit the financial statements for the year 2020 of Cung Dien Mua Dong, the value of the contract is 110 million dong.
After signing, Hanoi CPA Company established an audit team, led by Le Van Do; the accused Nguyen Thi Hai (Deputy General Director) served as the Team Leader… During the audit process, Do, Hai, and employee Phan Anh Hung (accused in the case) legally reported the audit to help Tan Hoang Minh create conditions for deception in bond issuance.
The inspection team, chaired by the Ministry of Finance on compliance with independent audit regulations at Hanoi CPA Company and Nam Viet Audit Company, also concluded: “Auditor seriously violated auditing standards in providing audit services for the 2020 and 2021 Financial Statements of Cung Dien Mua Dong; Financial Statements of Ngôi Sao Việt and Soleil”.
The inspection team, chaired by the Ministry of Finance on compliance with independent audit regulations at Hanoi CPA Company and Nam Viet Audit Company, also concluded: “Auditor seriously violated auditing standards in providing audit services for the 2020 and 2021 Financial Statements of Cung Dien Mua Dong; Financial Statements of Ngôi Sao Việt and Soleil”.
Unsatisfactory valuation results
Regarding the valuation agencies, the adjudicative agency identified three representatives of the companies as Ngoi Sao Viet, Soleil, and Cung Dien Mua Dong, who signed contracts to issue certificates and valuation reports for the bond packages issued by the three companies, with a total value of more than 13,302 billion dong.
Specifically: Ecomax Valuation Limited Liability Company, asset valuation for 4 bond packages of Ngoi Sao Viet Company, Soleil Company, and Cung Dien Mua Dong Company, with a total valuation value of over 5,110 billion dong; VAA Audit and Valuation Limited Liability Company, asset valuation for 3 bond packages with a total valuation value of over 5,322 billion dong; Thanh Do Valuation Joint Stock Company, asset valuation for 1 bond package with a value of over 1,229 billion dong; Hanoi CPA Company, asset valuation for 1 bond package with a value of over 1,640 billion dong.
The Price Management Department, Ministry of Finance has evaluated the valuation certificates and valuation result reports issued by the Valuation Companies for the 3 companies of Tan Hoang Minh as “not reliable”.
The misconduct of the auditing group and the valuation companies created conditions for the 3 aforementioned subsidiary companies of Tan Hoang Minh Group to successfully offer 9 separate corporate bond packages and raise nearly 14,000 billion dong. Thereby, helping Mr. Do Anh Dung misappropriate 8,643 billion dong from more than 6,000 investors.
