Fraud and stock manipulation in FLC case are deliberate: prosecutors

The trial in Hà Nội on Monday. — VNA/VNS Photo Phạm Kiên

HÀ NỘI — Prosecutors in the fraud and stock manipulation case of FLC Group say the defendants’ violations are conscious and deliberate actions. 

In the ongoing trial against FLC chairman Trịnh Văn Quyết and 49 other defendants, prosecutors on Monday said that Quyết is the mastermind behind the case who made all necessary preparations to organise, coordinate and delegate other defendants in a series of deliberate fraudulent actions over many years, with multiple instances of unwarranted increase of capital contributions. 

The prosecution statement said that this series of violations started from the purchase of Green Belt Company (later renamed Faros), with five allegedly baseless increases in owner’s capital contribution from VNĐ1.5 billion ($59,300) to VNĐ4.3 trillion ($170 million).

The defendants then allegedly arranged paperwork to list the company’s stocks, ROS, on the HCM City Stock Exchange (HOSE). 

With more than 391 million shares sold at their inflated value, the defendants accumulated more than VNĐ4.8 trillion ($190 million) and embezzled over VNĐ3.6 trillion ($142.4 million) of stock investors, according to the prosecutors. 

Prosecutors also said that the other defendants are Quyết’s family members, subordinates and acquaintances. 

Among them are two of Quyết’s younger sisters Trịnh Thị Minh Huế and Trịnh Thị Thúy Nga, who he trusted and assigned various fraudulent actions, including posing as shareholders on paper, holding investment entrustment to legitimise inflated capital contributions, recording falsified information in financial statements for audits, as well as other documents as part of the necessary procedures to list ROS on the stock exchange. 

Other defendants are from the Department of Public Company Supervision (under the State Securities Commission), the Việt Nam Securities Depository and Clearing Corporation and the HOSE used the fraudulent information in Faros’ financial statements and documents to approve the company and its stock registration, listing 430 million ROS shares on the HOSE. 

According to the prosecutors, without the contributions of any of the defendants in the listing of ROS shares, Quyết would have been unable to sell more than 391 million stocks to investors.

At the trial on Monday, most defendants accused of helping Quyết, Huế and others in their wrongdoings admitted to the actions and charges brought against them by the prosecutors. 

However, they and their defence lawyers said they are unaware of the inflated capital investments and ROS share listing for fraudulent appropriation of property.  

In response, the prosecutors said that these defendants signed documents related to the unwarranted capital contribution increases multiple times, and accepted investment entrustments without having actual capital funding or involving in investment activities themselves.

Therefore, they must have known that their signature on these falsified documents is illegal, according to the prosecutors. 

These documents include capital increase documents, financial statements and payment orders to seven organisations and seven individuals borrowing funding from Faros, without taking into account the company’s actual operations, its regulations or business laws, but at the direction of Quyết, Huế and Doãn Văn Phương (FLC’s CEO, who are in hiding). 

Therefore, the prosecutors rejected the reasoning of the defendants and their lawyers, while also asserting the interconnection of the defendants’ roles and actions as accomplices with Quyết, Huế and Nga. — VNS