What did former HoSE Deputy General Director Le Hai Tra declare in the Trinh Van Quyet case?

On July 27 and 28, the lawyers and 50 defendants continued their defense after the Hanoi People's Procuracy proposed the sentence.

Mr. Le Hai Tra, former member of the Board of Directors, Permanent Deputy General Director of the Ho Chi Minh City Stock Exchange (HoSE) was proposed to be sentenced to 6-7 years in prison, the second highest sentence proposed among the group of 7 former officials of the State Securities Commission, the Securities Depository Center and HoSE.

Mr. Tra was accused of knowing Trinh Van Quyet, knowing that there was not enough basis to determine that Faros Company's capital was 4,300 billion VND, but "put pressure" on his subordinates to propose approving the listing dossier of this company, despite the irregularities. He was also one of the 6 members of the Listing Council, signing the approval for Faros' ROS shares to be listed on the stock exchange. According to the Procuracy, Mr. Tra's actions were to "aid and facilitate" Mr. Quyet to sell fake shares, taking money from investors.

Defending himself for nearly 10 minutes, Mr. Tra explained two things: HoSE could not have made any mistakes if the previous agencies had worked properly; his working environment was under a lot of pressure from all sides.

According to the defendant, in the process of a business from its establishment to all activities of increasing capital to develop production and business activities, then becoming a public company and listing, there is a series of different events, processes and compliance with different legal regulations.

"For HoSE, we often see ourselves as the final bridge between businesses and the investment community in the market. We are the ones drinking water at the end of the entire process from registration to being ready to become a listed business on the stock exchange," said Mr. Tra.

According to Mr. Tra, HoSE is only an agency that uses and relies on information and documents from previous competent authorities to make decisions on approving listing on the stock exchange. In the documents that HoSE relies on, there are important documents such as audited financial statements, business registration certificates from the Department of Planning and Investment, public company approval documents from the State Securities Commission, and securities depository registration certificates from the Vietnam Securities Depository Center.

"Without these documents, without the synchronization and consensus on the data of VND4,300 billion, HoSE could never have given its approval for Faros's listing dossier," said Mr. Tra, adding that this is a series of strict and difficult regulations and conditions, so in fact, in 25 years of operation of HoSE, only about 500 companies have been listed, while the number of businesses submitting dossiers is up to millions.

For HoSE, the process of reviewing and evaluating listing dossiers for businesses is a time-limited procedure. All of that information is monitored by investors. "There are many organizers who have investment plans in advance. The investment strategy can be waiting for the day the shares are listed to divest or buy more of these shares on the floor," the defendant stated the market context to justify his second point of view about the pressure on himself and HoSE in general.

According to Mr. Tra, any decision, any change, any delay related to the consideration of listing shares on the stock exchange will "always have an impact and can cause damage to investors". "HoSE is the unit that operates and organizes a market with a lot of such pressure. We are also aware of the needs of investors and businesses. Therefore, HoSE's process has tried to minimize and shorten that time to avoid unnecessary risks for the investment community", Mr. Tra said with both hands clenched before the defendant's podium.

Proposed sentence by the Procuracy for 50 defendants

Defending Mr. Tra, lawyer Phan Trung Hoai said his client's violations occurred in a context where the law was not strict enough, and businesses took advantage of loopholes to make profits. The act of artificially raising capital and listing ROS shares on HoSE by Mr. Quyet and his accomplices occurred during the period 2014-2016, when the Securities Law 2006 (old law) was being applied.

According to Article 40 of this law, when listing on the stock exchange, enterprises must meet the conditions on capital, business activities and financial capacity, number of shareholders or number of securities owners; must be responsible for the accuracy, honesty and completeness of the listing dossier...

Lawyer Hoai cited and assessed that, at the time of the incident, there were still no regulations on the mechanism and responsibility for checking and disclosing business information. This created loopholes for those who accepted administrative penalties to deliberately conceal information for personal gain. Meanwhile, the sanctions for violations were not strong enough to prevent and deter.

Providing the organizational regulations of HoSE, the lawyer said that HoSE's main task is to organize and operate the securities trading market, approve, change, cancel listing, and supervise the maintenance of securities listing conditions, report and recommend violations to the State Securities Commission... Therefore, legally, HoSE is not the agency that evaluates business registration dossiers.

"The appraisal and approval of securities offerings and capital use plans are under the functions and authority of the State Securities Commission. Hose is not assigned this authority," lawyer Hoai analyzed.

Sharing the same view with his client that "HoSE only drinks water from the source", lawyer Hoai said that the prosecution agencies need to consider Mr. Le Hai Tra's violations in the overall process. From the company being registered at the Department of Planning and Investment, the fraudulent financial report being approved by the auditing company, the company being approved by the State Securities Commission as a public company, the Securities Depository Center issuing a certificate. Finally, HoSE approved the shares to be "listed".

Being proposed to receive the highest sentence among the group of 7 former officials (8-9 years in prison), Mr. Tran Dac Sinh, 68 years old, former Chairman of the Board of Directors of HoSE, was assessed as the "mastermind" in the group of crimes of abusing position and power while performing official duties..Because he knew Trinh Van Quyet, Mr. Sinh created conditions and urged his subordinates to quickly approve the listing of ROS shares on the stock exchange even though he knew clearly that the conditions were not met.

Defending Mr. Sinh, lawyer Nguyen Thi Yen said that her client and the officers at HoSE in general were under the same pressure to quickly resolve the company's documents. Ms. Yen denied that her client chaired an extraordinary meeting to specifically direct and urge the listing content for Trinh Van Quyet's company, which according to the meeting minutes, was a monthly meeting with 10 contents. Furthermore, before this meeting, all 6 members of the HoSE Listing Council (including Mr. Le Hai Tra) had given their opinions approving the listing of Faros Company.

Therefore, according to the lawyer, Mr. Sinh did not commit the crime "as the mastermind" as the Procuracy alleged. The former General Director of HoSE is now old, weak, and his family is in great difficulty, but he paid 200 million VND even though he was not forced to; he was not fully aware of the consequences of his actions, and did not benefit from Faros Company... so the lawyer asked the court to consider this as a mitigating circumstance for his client.

When asked by the court, Mr. Sinh did not add to his lawyer's defense, only stating that he was "very sad" because he had spent more than 20 years building the stock market from scratch, and now the market has reached tens of millions of dollars, for the court to consider.

The trial is on its seventh day. Lawyers for 42 of the 50 defendants have completed their defense.