Former FLC Chairman Trinh Van Quyet denies fraud allegations

Mr. Trinh Van Quyet, former chairman of FLC Group, along with his two younger sisters Trinh Thi Minh Hue, Trinh Thi Thuy Nga and 5 others have just been proposed for prosecution by the Ministry of Public Security's Investigation Police Agency (C01) for the crime ofStock manipulationandFraudulent appropriation of property.

In the same case, 13 people were accused.Stock market manipulation, 22 guiltyFraudulent appropriation of property, 7 people convictedAbuse of position and power while performing official dutiesorDisclosing false information or concealing information in securities activities.

Of the 50 defendants, 11 are Mr. Quyet's siblings, cousins, and nieces and nephews. Many defendants are husband and wife, father and son; three are Mr. Quyet's personal drivers and classmates.

>>List of 50 defendants

According to the investigation, in August 2012, Mr. Quyet asked his subordinates to buy back an entertainment company for 1.5 billion VND but did not put it into operation immediately. After many name changes, this company was renamed Faros Construction Joint Stock Company. Two years later, the FLC Chairman directed his sister and several others to create and sign fake capital contribution documents to start a campaign to inflate the charter capital for Faros.

As the first Chairman of the Board of Directors, Mr. Doan Van Phuong (General Director of FLC, who has absconded) directed members of the Board of Directors and the Board of General Directors to issue resolutions on increasing charter capital, preparing fake capital contribution records, accounting, and using fake capital contributions.

Authorities said Mr. Phuong had left for the UK and had not returned to Vietnam so there was no statement.

Another important link in Faros is Trinh Van Dai (Mr. Quyet's cousin). Mr. Dai was asked by Ms. Trinh Thi Minh Hue (Mr. Quyet's sister) to be the Chairman of the Board of Directors of Faros since 2014. However, in reality, Ms. Hue is the one who manages the seal and runs all activities.

While not holding a shareholders' meeting, with the "label" of Chairman of the Board of Directors and Deputy General Director, Mr. Dai signed forged resolutions, contracts, and documents in the name of shareholders. From there, Ms. Hue used it as a basis to inflate the charter capital.

Before Faros was listed on the Ho Chi Minh City Stock Exchange, Mr. Dai returned more than 46 million shares under his name to Mr. Quyet. This was legalized by 5 transfer contracts but no payment was made.

Mr. Dai's actions were assessed by the investigation agency as helping Mr. Quyet and his accomplices inflate charter capital, then list and sell shares to appropriate more than 3,600 billion VND.

At the investigation agency, Dai admitted all the violations but denied the purpose of fraud and property appropriation. He stated that he did not benefit from the violations but only received a salary of 39 million VND/month as Deputy Head of the Materials Department of FLC Land and 41 million VND/month as Deputy General Director of Faros.

Like Mr. Dai, defendant Do Nhu Tuan, Deputy General Director of FLC, was also assigned by Mr. Quyet to concurrently hold the position of Director of Faros. In this position, Tuan signed fake contracts and documents to create a legitimate accounting cash flow, concealing the fake capital contribution.

Before Faros shares were listed, Mr. Tuan was the owner of 50,000 shares but in reality he did not own them. According to C01, Tuan admitted to the violations but said he did not intend to defraud and appropriate property and did not receive any benefits. This suspect only received a monthly salary of 115 to 120 million VND per month.

In addition to the defendants Dai and Tuan, 20 other people under investigation in the supplementary phase all only admitted to wrongdoing in helping to inflate capital for Faros. They denied the accusations.Fraudulent appropriation of property.

In the previous investigation, C01 assessed that Mr. Quyet knew clearly about inflating Faros' charter capital to list shares and then sell them to investors, illegally appropriating money, but still did it. Initially, Mr. Quyet "honestly confessed" about directing his sister to carry out stock manipulation. However, when he was prosecuted for the crime ofFraudulent appropriation of property, former FLC chairman changed his testimony, "did not admit to the crime and blamed his sister".

There are 187 people involved in Mr. Quyet's fraud.

Among the group accused of fraud, only former permanent vice chairwoman of the Board of Directors of FLC Group Huong Tran Kieu Dung and Faros Deputy General Director Nguyen Thien Phu did not deny the accusations, the investigation conclusion stated.

Ms. Dung admitted that she had discussed with Mr. Quyet and knew clearly the purpose of increasing capital and listing shares to raise capital from investors. From there, Ms. Dung signed contracts and documents to help Mr. Quyet legitimize the flow of money to increase capital.

In addition, C01 concluded that from 2016 to 2022, there were 187 people named as legal representatives, employees of companies in the FLC ecosystem, and relatives and friends of Mr. Quyet involved in the fraud. They were identified as having signed documents such as payment authorizations, withdrawal papers, deposits, and checks, so that Mr. Quyet's group could carry out procedures to create fake cash flows. The purpose of this act was to legalize and conceal the fake capital contribution before Faros' listing.

The investigation agency believes that the above people show signs of crime.Fraudulent appropriation of propertyorConcealing a criminalHowever, when they signed the documents, they did not know the nature of the matter and only performed each step individually. These people also did not participate in preparing the capital contribution documents and were not discussed, so C01 did not consider criminal proceedings.