Two times of selling shares illegally by Mr. Trinh Van Quyet
Before getting into trouble with the law, FLC Group Chairman Trinh Van Quyet was twice administratively fined for illegally selling shares, causing investors to panic.
On March 29, Mr. Trinh Van Quyet, 47 years old, was prosecuted and detained by the Ministry of Public Security's Investigation Police Agency to investigate the crime.Stock market manipulation,according to Article 211 of the Penal Code; the maximum penalty is 7 years in prison.
He and a number of others were accused of "manipulating the stock market" and "concealing information in securities activities", causing serious damage to investors and affecting the operation of the Vietnamese stock market.
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| FLC Chairman Trinh Van Quyet. Photo: Ngoc Thanh |
According to FLC's management report, by the end of 2021, Mr. Quyet owned more than 215.4 million FLC shares, equivalent to 30.34% of the group's total shares. In addition, the group's chairman also owned more than 23.7 million shares of FLC Faros Construction Joint Stock Company (ROS), 7.5 million GAB shares of FLC Mining Investment and Asset Management Company and more than 3.1 million ART shares of BOS Securities Company.
According to the closing value of March 29, Mr. Quyet's total shares are worth more than 4,400 billion VND.
Mr. Quyet's scandal related to securities occurred in November 2017 when he sold 57 million shares but did not report the transaction information to the Securities Commission and the Ho Chi Minh City Stock Exchange. Mr. Quyet's transaction was carried out when an FLC share was at the threshold of 7,100-7,700 VND, with the transaction value estimated at more than 400 billion VND.
For this behavior, Mr. Quyet was administratively fined 65 million VND by the State Securities Commission. The "F-family" stocks then repeatedly caused investors to stagger.
Five years later, on the afternoon of January 10, Mr. Quyet was discovered to have sold 74.8 million FLC shares without disclosing the information beforehand. On January 11, the Ho Chi Minh City Stock Exchange (HoSE) announced the cancellation of this transaction - an unprecedented measure in the Vietnamese stock market.
On January 17, Mr. Quyet was fined VND1.5 billion by the State Securities Commission, the highest level under current regulations on securities, and suspended from trading for 5 months.
According to lawyer Dang Van Cuong, "manipulating the stock market" means using one or more of one's own or other people's trading accounts or colluding with each other to continuously buy and sell securities to create fake supply and demand; using methods or performing other trading acts to create fake supply and demand, manipulating stock prices. When the violation is not serious enough to be prosecuted criminally, the person causing the incident will only be subject to a maximum administrative fine of 1.5 billion VND, as in Mr. Quyet's case in January.
If it is an act of "concealing information in securities activities" as the two times above, Mr. Quyet will only be administratively punished. However, if he has been administratively punished for this act but still violates it, he will be prosecuted for criminal liability.Intentionally disclosing false information or concealing information in securities activities,according to Article 209 of the Penal Code.
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| Police sealed computers while searching FLC headquarters. Photo:People's Public Security |
In addition to Mr. Quyet, in recent years, many people have been criminally prosecuted for stock manipulation. In mid-2020, Ms. Pham Thi Hinh, former chairwoman of Binh Thuan Industry and Mineral Joint Stock Company (KSA) and three others were sentenced to between 15 months' suspended sentence and 18 months' imprisonment for the crime ofStock market manipulation.
Ms. Hinh was accused of masterminding and directing her subordinates to use 69 accounts to continuously execute orders to buy and sell KSA stock codes to create fake supply and demand in the market to "inflate prices". This action was determined to have caused damage to nearly 1,500 KSA stock investors of more than VND8 billion.
In another case in 2017, Hanoi police prosecuted Ms. Nguyen Van Giang, former director of Dong A Bank Securities Company Limited - Hanoi branch, also for the crime.Stock price manipulationMs. Giang was accused of using information from many other people to open securities accounts or borrow securities accounts at many securities companies to cross-trade CDO stocks.
The investigation agency said that Director Giang's actions pushed up the price of CDO shares. Ms. Giang then sold them for profit, causing losses to 572 investors of more than 11 billion VND.