Friday , March 29 2024

Tan Hoang Minh: the anatomy of a bond issuance fraud


Subsidiaries of real estate developer Tan Hoang Minh have been buying bonds from each other and illegally selling them to retail investors as an “investment partnership”.

The Hanoi company saw its chairman and five other current and former executives being arrested this week for alleged frauds in nine bond issuances that raised over VND10 trillion ($437 million) between July 2021 and March 2022.

Each was meant to mobilize funds for a sister company and not the issuer itself.

One such issuance was made by real estate subsidiary Vietstar in July 2021 when it raised VND800 billion to buy over three million shares of Viet Tien Investment, Development and Trading, another subsidiary.

Tan Hoang Minh chairman Do Anh Dung became a legal representative of Viet Tien in 2017, and he and his two sons own the closely held company.

Two issuances by Winter Palace and three by Soleil Investment and Hotel Services worth VND2.2 trillion were used for a joint investment with Hoang Hai Phu Quoc House Investment Development Corp, whose legal representative is Dung’s son Do Hoang Viet.

Data from BaoViet Securities and An Binh Securities firms shows that company’s purchase of VND1.6 trillion worth of bonds from Vietstar and Soleil meant cash moved back and forth between Tan Hoang Minh and its subsidiaries.

But Tan Hoang Minh did not buy the bonds with its funds, and instead invited retail investors to “partner” with it and offered guarantees of 12 percent interest per year.

Over the last few months brokers have been advertising the bonds on social media with promises that anyone with over VND100 million could become a partner.

Vietnamese laws do not allow companies to issue private placement bonds to the public and can only sell them to professional investors, defined as those with total securities holdings of over $2 billion or with a taxable income of VND1 billion.

But for the Tan Hoang Minh issuances brokers even promised to provide a professional investor certificate for those who did not qualify.

The mostly inexperienced investors, not aware of the risks involved, invested their money because of the high interest rate offered.

Tan Hoang Minh posted a loss of VND2.48 trillion in 2020.

Read More :
- Reduce Hair Loss with PURA D’OR Gold Label Shampoo
- Castor Oil Has Made a “Huge” Difference With Hair and Brow Growth
- Excessive hair loss in men: Signs of illness that cannot be subjective
- Dịch Vụ SEO Website ở Los Angeles, CA: đưa trang web doanh nghiệp bạn lên top Google
- Nails Salon Sierra Madre