The Ministry of Public Security stated 6 reasons why subjects took advantage of to manipulate stocks in the FLC case.
The police are coordinating with the authorities to "patch" the loophole, hoping that in the coming time, the Vietnamese stock market will develop healthily according to the market mechanism.
On the afternoon of March 2, under the chairmanship of Minister, Head of the Government Office Tran Van Son - Spokesperson of the Government, the Government Office held a regular press conference for February 2024. The meeting was held after the regular Government meeting on the same morning. Also attending were representatives of leaders of relevant ministries, branches and agencies.
Lieutenant General To An Xo, Assistant to Politburo member - Minister of Public Security - Spokesperson of the Ministry of Public Security attended and answered questions from reporters related to the work field of the Ministry of Public Security.
At the press conference, Minister Tran Van Son announced the results of the regular session in February 2024 chaired by Prime Minister Pham Minh Chinh to assess the socio-economic situation in February and the first two months of 2024; the implementation of the 3 National Target Programs; disbursement of public investment capital and a number of other important contents; and proposed key tasks and solutions in the coming time.
Responding to reporters' questions about the FLC - Tan Hoang Minh cases, what the Ministry of Public Security warned about the stock market, Lieutenant General To An Xo said that through the FLC and Tan Hoang Minh cases, the Ministry of Public Security has sounded the alarm about the phenomenon of stock market manipulation. Currently, the Investigation Agency has reached a conclusion, the People's Procuracy has issued an indictment and the court will soon bring these two cases to trial.
Regarding the FLC case, the Investigation Agency has clarified that the subjects committed 2 crimes.
The first is the act of fraud and appropriation of assets. The subjects created and signed fake capital contribution documents at FLC FAROS Construction Joint Stock Company, inflating the amount by 3,102 billion VND. The capital was increased from 1.5 billion to 4,300 billion VND, then legalized the documents so that the State securities management agency could accept the registration for depository. From there, they committed fraud and appropriated assets of 3,620 billion VND.
Second is the act of manipulating the stock market: The method is that the subjects borrowed personal documents of everyone in the family to establish 20 companies but did not conduct business, using the legal identity to open 500 securities accounts to conduct stock manipulation. Accordingly, from May 26, 2012 to January 10, 2022, the subjects used 190 accounts to conduct manipulation, illegally profiting 723 billion VND.
"Through the methods and tricks of the subjects, the Investigation Agency has determined that there are loopholes and shortcomings in state management and some related legal regulations" - Lieutenant General To An Xo said and listed 6 reasons that led to the subjects being able to manipulate the stock market.
Specifically, the authorities lack inspection and supervision of capital contributions to enterprises. These agencies allow organizations and individuals to self-declare without control, leading to false declarations and legalization of documents.
Third, due to lack of control over account opening, subjects opened many accounts to manipulate stocks.
Fourth, the sanctions are still light and not enough to deter violators.
Fifth, the State's regulations on quality control of auditing services and individual responsibilities are not specific and loose.
Sixth, the lack of control of social networks leads to some people taking advantage of closed groups to call for and attract investors for the purpose of control and manipulation.
Seventh, currently, there are no regulations or guidelines as a legal basis for determining damages for investors participating in the period when securities are manipulated.
“We have drawn the above 6 causes from this lesson. Currently, the Public Security Agency is coordinating with the authorities to “patch” the loopholes. We hope that in the coming time, the Vietnamese stock market will develop healthily according to the market mechanism. And we also warn against taking advantage of loopholes to manipulate the stock market. If you do, you will be punished according to regulations,” Lieutenant General To An Xo affirmed.