How healthcare business Sen Tai Thu swindled $40M from investors

Among the victims is a 50-year-old woman in Hanoi who was informed about Sen Tai Thu by a bank employee in early 2021.

The latter had touted the company as a reputable and trustworthy healthcare service provider and told her she could get a 12% annual return by becoming a shareholder.

But the company would buy back all her shares and pay her the interest in a year, she was told.

The woman invested VND1.2 billion. A year later she was persuaded by the employee to leave her initial investment and interest with the company for another year.

But rumors began in early 2023 that the company was swindling investors’ money.

The woman asked for just her principal back saying she would forgo the interest, but the company said that it was in trouble and could not “buy her shares back.”

She was among over 400 people who had invested in it between October 2020 and March 2023, according to the Hanoi police.

The police on Monday arrested the former chairwoman of the company, Pham Thi Hoa, and her two daughters, Nguyen Thi Thuy Linh and Nguyen Thi Lan Huong, who were former CEO and former deputy CEO, for fraudulent appropriation of assets.

Nguyen Thi Lan Huong, former CEO of Sen Tai Thu. Photo courtesy of the company

Sen Tai Thu often advertised itself as being founded in 1992, but in fact was only established in 2018 as Sengroup Wellness Vietnam with a charter capital of VND31.9 billion, in which Hoa had a 62% stake.

It changed its name to Sen Tai Thu later and used illegal methods to pump the charter capital five-fold to VND160 billion.

The company has eight facilities in Hanoi, the northern province of Thai Binh and the central city of Da Nang offering traditional medical treatments and massage. It also invests in property.

It made a loss of VND9 billion in 2022.

Since it had accumulated debts of VND300 billion after expanding its massage facilities, Hoa’s daughters raised funds by promising investors 12% returns.

They gave them false information about the company and promised to buy back the shares.

They paid people commissions of 7-30% for each contract. Most of the brokers were bank employees and stock brokers who already had a list of clientele with money.

The police said Sen Tai Thu had illegally raised VND1 trillion from investors and used the majority of it to pay debts. It is now insolvent.