Companies buy back bonds prematurely after Tan Hoang Minh arrests

By Quynh Trang July 26, 2022 | 04:30 am PT

An apartment building developed by Tan Hoang Minh in Hanoi. Photo courtesy of Tan Hoang Minh

Companies prematurely redeemed bonds worth VND49.1 trillion ($2.1 billion) in the second quarter, nearly four times the first quarter figure, spooked by the arrests of business executives for alleged issuance-related fraud.

The redemptions added up to VND61.9 trillion in the first six months, according to the Ministry of Finance.

Do Anh Dung, chairman of property company Tan Hoang Minh, and six others were arrested in early April for "alleged fraudulent appropriation of assets" through improprieties in bond issuances.

Authorities also cancelled the company's nine bond issuances worth more than VND10 trillion (US$437 million) between July 2021 and March 2022.

Since then a number of big companies have bought back or announced plans to buy back their bonds even before maturity date.

Electric equipment manufacturer Gelex redeemed bonds worth VND1.4 trillion, some of them only issued five months earlier.

Retail chain Intimex Vietnam shelled out VND2 trillion for redemption, and HCMC Infrastructure Investment (CII) plans to buy back VND2.8 trillion worth of bonds from now through February.

Analysts at brokerage SSI Securities Corporation said the revocation of Tan Hoang Minh’s bonds has made both issuers and investors more cautious.

The Ministry of Finance advises retail investors to be careful about buying privately placed bonds.