Do Thanh Nhan, former chairman of Louis Holdings trading firm, was accused of manipulating the stock market to earn more than VND153 billion ($6.46 million).
Investigators of the Ministry of Public Security has proposed that Nhan; Do Duc Nam, general director of brokerage firm Tri Viet Securities; Trinh Thi Thuy Linh, COO of Louis Holdings and Le Thi Thuy Lien, financial services executive of Tri Viet Securities, be prosecuted for stock market manipulation.
The penalty would be either cash fines of up to VND4 billion or a prison sentence of 2-7 years.
The four were arrested in April.
Investigators found Nhan and others had used multiple accounts to buy and sell tickers, manipulating the prices of TGG of Louis Capital, BII of Louis Land and other stocks between 2020-2021.
Nhan and his relatives and friends purchased 9 million BII shares of Bao Thu Industrial Company towards the end of 2020. At the moment, Bao Thu Company was performing poorly and faced delisting.
He proceeded to buy, sell, and acquire stocks with the code TGG of Truong Giang Joint Stock Company at the price of VND1,800 per share on the advise of Nam.
He outlined how to manipulate the market with Nam once he obtained two stock codes, BII and TGG.
They agreed to open securities accounts in Nhan’s friends and relatives’ names in order to buy and sell stocks. The goal was to boost liquidity and drive up the prices of BII and TGG in order to gain profit.
Nhan filed to open two accounts at Beta Securities Joint Stock Company and Tri Viet Securities Company after deciding on how to carry out his scheme.
Simultaneously, Nhan’s relatives and acquaintances opened 18 accounts at Tri Viet and other security companies. These accounts were opened and transferred to Nhan and Nam to use.
Nhan’s loan from Tri Viet was the primary source of funds for trading and order matching.
To manipulate the market, Nam asked Huong and Lien to continuously issue orders, match buy and sell internally, cross-sell, match orders to construct ATC closing prices with both TGG and BII shares, according to the investigation agency.
Nam informed Nhan about the list and the amount of money in each account on a daily basis.
BII’s stock price had successive sessions of ceiling gains with high matching volume and liquidity. BII peaked at VND33,800 per share on September 18, 2021, over 10 times the price when Nhan’s group purchased it in January 2021.
TGG has likewise steadily grown to the ceiling price, peaking at VND74,800 per share on September 22, 2021. This price rose 37 times from when Nhan purchased it.
Nhan authorized his staff to transfer funds from the sale of shares to securities accounts in the group at various banks. Nhan’s subordinates gave the documents to the person who opened the account at the end of the month for him to sign and validate the formality of the application.
According to the findings, Nhan admitted to manipulating the stock market with the codes BII and TGG, earning more than VND153 billion.
Other tickers related to Louis Holdings, including AGM, APG, DDV and SMT also constantly hit ceiling prices and scaled new peaks.
However Nhan claimed to have purchased these shares in order to own and acquire the company rather than to influence it.
Last September, Louis Capital, a subsidiary of Louis Holdings, said in a statement to the State Securities Commission that it has “never commited any act to manipulate the stock market.”
In March, Louis Holdings was fined VND160 million and banned from trading in the securities market for two months for buying 4.6 million shares of TGG, exceeding the 3.6 million it had registered with authorities.
Louis Capital was fined VND232.5 million in January for violating the regulations on information disclosure, and that on the numbers of non-executive and independent members in the company’s board.
Tri Viet Securities was also fined VND310 million and terminated its pre-sale services in January for providing advance payment without the approval of the authorities, and employing uncertified brokers.
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