Corporate bonds

SSC Targets False Appropriation of Corporate Bonds | Business

This was allegedly done due to the disclosure of some false information and concealment of information in cases involving the issuance of corporate bonds.

According to the State Securities Commission, the basis of Decision 181/QD-UBCK was to cancel nine separate bond issues of Viet Star Real Estate Investment Company Limited, Winter Palace JSC and Investment and Service JSC Soleil Hotel owned by Tan Hoang Minh Hotel Service Trading Company Limited. This was done in accordance with point C of clause 1 of article 9 of the Securities Law of the National Securities Commission. He called for the immediate suspension and cancellation of activities related to securities and the stock market.

The violations committed by the three subsidiaries of Tan Hoang Minh Group are based on the fact that they are all unlisted companies and do not report to the State Securities Commission on issuances and only register information via the corporate bond portal of the Hanoi Stock Exchange (HNX). This is a serious violation of Government Decree No. 153/2020/ND-CP of December 31, 2020, on the private offering and trading of corporate bonds on the domestic market and on the supply of corporate bonds on the international market.

The State Securities Commission is handling this issue by coordinating with HNX, relevant authorities and other related units to verify advising organizations and issuing agents for the offerings of the three subsidiaries mentioned above, and at the same time, SSC will also strictly monitor and manage any other violations that these three affiliates may have committed.

A representative of the State Securities Commission said that issuing companies, whether public or non-public, and intermediary organizations consulting on offering documents, registration, bond depositary or Issuing agents who violate the private placement of bonds will be dealt with in accordance with the provisions of the decrees sanctioning administrative violations in the field of securities and the stock exchange. In such cases, Decree 156/2020/ND-CP and Decree No. 128/2021/ND-CP have been amended and supplemented in a number of articles.

For any act of disclosing false information or concealing a truth in private bond offerings, all offending organizations and individuals can also be prosecuted for criminal liability for causing damages to investors up to approximately 1 billion of VND or more, and for illegally making profits. the amount of the fine will be more than 500 million VND. In some broadcasts, the Tan Hoang Minh group even played the role of underwriter, payment guarantor or representative of the bondholder of member companies. It is possible that the Tan Hoang Minh Group used these bonds later to offer them to several other investors.

According to the Securities Act 2019, corporate bonds issued by individuals are only sold to professional investors. Specifically, individual investors must have securities practice certificates. These are natural persons holding names of listed securities registered for trading with a value of at least VND 2 billion. On the other hand, institutional investors are commercial banks, foreign bank branches, finance companies, insurance companies, securities companies, and securities investment fund management companies.

The fact that Mr. Do Anh Dung, Chairman of the Tan Hoang Minh Group, and six other accomplices were prosecuted and detained, then accused of having fraudulently appropriated assets related to the issuance of corporate bonds of their three subsidiaries, shows that the matter may also be related to the illegal offering of corporate bonds to other investors and the provision of incorrect information or even misuse of post-issue capital.