Vietnam tightens bond purchase after Tan Hoang Minh fraud

It requires “professional” bond investors to maintain an asset of at least VND2 billion ($84,477) in the six months prior to purchase. The asset must not contain debts.

This is to prevent amateur investors from acquiring the professional title by borrowing to have a VND2 billion asset.

The decree also does not allow amateur investors to combine asset with another investor in their purchase.

Hanoi-based Tan Hoang Minh, a developer of major luxury apartment projects, saw its chairman and five executives arrested in April due to alleged frauds in nine bond issuances worth VND10 trillion.

The company used its subsidiaries to raise fund for another subsidiary, and invited retail investors to “partner” in the purchase with guarantees of 12% annual interest.

Tan Hoang Minh bond brokers promised amateur investors to provide them with a professional investor certificate for those who did not qualify.

Nguyen Hoang Duong, deputy head of the finance and banking department under the Ministry of Finance, said Monday that the violations of bond issuers and brokerages have caused losses to investors.

He added that the latest decree does not seek to tighten bond regulations but to increase transparency in regulations to protect investors.