Cancellation of FLC transaction to hurt investors

As Vietnam stock regulators keep a T+2 cycle, which means it takes 48 hours or more for the shares to be transferred from the seller’s account to that of the buyer, there is still time to cancel the transaction without affecting the buyer, the head of a brokerage who asked to not be identified told VnExpress.

Meanwhile, investors who bought the shares from other sellers will have to receive the stock, which has dropped nearly 18 percent in the last three sessions. They will struggle to sell the shares now as there will be few buyers, given the negative news going around for the last few days about the sale by Trinh Van Quyet, chairman of property and leisure company FLC Group.

Brokerages are set to lose money because of the cancellation. The revenue from fees and taxes they would have received if the transaction was not canceled is over VND6 billion ($264,300), said the brokerage head.

"We are waiting to see if brokerages will be compensated for the loss in this transaction," he added.

FLC stock on the Ho Chi Minh Stock Exchange (HoSE). Photo courtesy of TradingView

Quyet has come under fire for not disclosing his plan to sell 175 million shares ahead of the sale Monday, causing outrage among investors who called him a "fraudster" on social media.

Vietnam laws require big shareholders to submit their plans to sell shares to stock authorities three working days before the sale.

The cancellation of a transaction involving 74.8 million shares is unprecedented in Vietnam’s stock market.

Founded in 2001 and headquartered in Hanoi, the FLC Group operates in real estate development. It also engages in real estate consulting and investment, financial consulting, and property exchange services.

A multi-sector corporation, the company’s other activities include construction, aviation (it owns Bamboo Airways), healthcare, education, advertising, construction, and hospitality.