How former FLC chairman earned $146M from stock manipulation

By Pham Du   October 29, 2023 | 08:24 pm PT
How former FLC chairman earned $146M from stock manipulation
Trinh Van Quyet in the central province of Quang Binh, January 2021. Photo by VnExpress/Hoang Tao
Former FLC chairman Trinh Van Quyet had instructed his sisters and employees to manipulate trading of shares worth VND3.6 trillion ($146 million) in a subsidiary.

This is the conclusion by the Ministry of Public Security after over a year of investigations.

It said Quyet, once one of the richest people on the stock market, manipulated stocks and fraudulently appropriated assets.

Quyet’s sister Trinh Thi Minh Hue, chairwoman of FLC Faros Construction, and 45 accomplices used 859 stock accounts to trade large volumes of ROS and four other FLC-related shares, including by trading between each other, to throw dust in investors’ eyes.

They would often cancel a trading order immediately after placing it.

These were meant to give stock market investors the illusion that ROS shares were in demand and would gain.

Between September 2016 and March 2022 Quyet instructed his sister Hue to sell nearly 400 million shares of the company after manipulating their price upward to earn VND3.6 trillion.

The police said Quyet had confessed in the beginning to being the mastermind behind the manipulation, but later retracted it and claimed Hue did it on her own.

She too had said at first she had done it at Quyet’s behest but later claimed she had committed the crimes on her own.

The police also found that FLC Faros’s charter capital was shown as thousands of times higher than it actually was by the duo faking documents.

Faros was established in 2011 with a charter capital of VND1.5 billion, but between 2014 and 2016 Quyet instructed Hue and other accomplices to increase it to VND4.3 trillion by getting friends and relatives to sign fake invoices to prove the company had received money from them towards its capital.

Hue transferred VND35 billion back and forth between them, and every time the money was moved it was made out to be a contribution towards the company’s capital.

After materializing VND4.3 trillion out of thin air in this manner, Quyet listed the company on the Ho Chi Minh Stock Exchange.

Since a public company needed to have at least 100 shareholders, 385 FLC employees were made shareholders.

Faros also hired an auditing firm to falsify its books.

The company managed to convince authorities to approve the listing of 428 million ROS shares in August 2016.

After the listing Quyet increased the charter capital to VND5.67 trillion, using the same method they did earlier.

Quyet was arrested in March 2022 for selling 74.8 million FLC shares without disclosing it to authorities.

The sale was cancelled the next day and some buyers received their money back, something unprecedented in Vietnam’s stock history.

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