First-ever trial on stock manipulation, fraudulent transfer opens
First-ever trial on stock manipulation, fraudulent transfer opens
The Ha Noi People Court on Wednesday opened the first-ever trial in the case of 15 people who were charged with stock trading document falsification, stock price manipulation and fraudulent asset transfers.
The accused include 35-year-old Tran Huu Tiep – former management board chairman of the Central Mining and Mineral Import Export JSC (MTM), 53-year-old Nguyen Van Dinh – former director of the mining firm Nari Hamico, and former officials of the Bank for Investment and Development of Viet Nam (BIDV) and Tien Phong Bank (TPBank).
The defendants were reported to have falsified trading documents of MTM shares on the Unlisted Public Company Market (UPCoM), manipulated MTM share prices and fraudulently transfered MTM stocks on the market.
According to the court’s indictment, Dinh bought the legal documents of MTM in 2010. The company had no charter capital and no business operation.
Dinh and Tiep collaborated with bank officials to falsify the company’s portfolio, which showed MTM had 103 shareholders with 31 million shares – equal to VND310 billion (US$13.8 million) – in 2014 to meet listing requirements.
Bank officials in 2013-15 helped the two defendants counterfeit financial invoices worth total VND485 billion to validate shareholders’ capital contribution and the firm’s business results.
While completing requirements to list MTM shares on the stock market, Dinh was put into custody and accused of counterfeiting business stamps and documents to avoid taxes and violating lending rules in another case.
Tiep and his partners continued to put MTM shares on the stock market in mid-April 2016 and he owned half of the company’s total post-listing shares, worth VND155 billion of charter capital.
By June 2016, when false trading of MTM shares was discovered, the company had had more than 1,150 investors, 71 per cent of whom had reported the case to the police for investigation.
MTM shares were immediately de-listed from the stock market after the investigation began.
According to the court, the accused caused a VND56 billion loss for the stock market, including VND53 billion worth of revenue from selling MTM shares to other investors.
The trial will last one week.
The finance ministry in February 2017 issued a decree regulating penalties on securities market violations. The decree was the combination between Decree 108/2013/ND-CP dated September 23, 2013 and Decree 145/2016/ND-CP, which had provided details for handling violations on the securities market.
In the combined decree, the article 14 of the section 8 states that an investor would be fined VND300-400 million for falsifying business information and VND1.8-2 billion for falsifying listing/trading portfolio.
The article 29 of section 11 states shareholders are fined VND800 million-VND1 billion for illegal internal trading and VND1-1.2 billion for manipulating stock prices without being investigated by the police, and VND1.2-1.4 billion for falsifying trading information.
