In the case that occurred at FLC Group Joint Stock Company (abbreviated as FLC Group) and related units, former FLC Chairman Trinh Van Quyet was proposed to be prosecuted for two crimes: fraud and asset appropriation and stock market manipulation.
According to the additional conclusion of the Ministry of Public Security's Investigation Police Agency, in terms of fraud alone, Mr. Quyet and his accomplices appropriated more than VND 3,600 billion from investors, through the trick of inflating the charter capital of Faros Construction Joint Stock Company (from VND 1.5 billion to VND 4,300 billion), registering to list shares and then selling them.
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Defendant Trinh Van Quyet, former Chairman of FLC Group
It is worth mentioning that for the actions of the defendant Trinh Van Quyet and his subordinates to be able to be carried out successfully, the prosecution agency determined that there was a very important role from a series of leaders and officials at the Ho Chi Minh City Stock Exchange (HoSE) and the State Securities Commission. In addition, it is impossible not to mention the assistance from securities companies.
The investigation concluded that, in order to carry out the registration procedure for listing ROS shares of Faros Company, one of the important documents is the financial report of 2014, 2015 and the first 3 months of 2016 of this enterprise.
The two units selected to conduct the audit are Hanoi Auditing and Accounting Company Limited (abbreviated as Hanoi Auditing Company) and ASC Auditing Company Limited (now TTP Auditing Company Limited).
Fraud of thousands of billions of dong, what did former FLC Chairman Trinh Van Quyet use the money for?
Issuing audit reports against regulations to get money
According to the Ministry of Public Security's Investigation Police Agency, when performing the audit contract, Mr. Nguyen Ngoc Tinh, General Director of Hanoi Auditing Company, clearly knew that the financial statements of Faros Company did not have enough basis to be fully accepted. However, this company still issued independent audit reports, all of which contained full acceptance of the financial statements and equity capital reports of Faros Company.
When Faros Company submitted an application for recognition as a public company to the Public Supervision Department of the State Securities Commission, the competent authority discovered that the audit report did not comply with regulations and requested an audit to be conducted and the audit report to be reissued.
However, Hanoi Auditing Company did not conduct a re-audit. Instead, Mr. Tinh and the company's auditor, Le Van Tuan, continued to issue 3 independent audit reports, fully accepting the financial statements and capital contribution reports of Faros Company's owners, only adding a "note to readers of financial statements" section.
The prosecution agency determined that the actions of the defendants Tinh and Tuan were against regulations and violated Vietnamese auditing standards. The issuance of incorrect audit reports created conditions for the defendant Trinh Van Quyet and his accomplices to use, prepare documents to request and list ROS shares.
At the investigation agency, Mr. Tinh admitted his actions and said that FLC Group and the companies in the ecosystem were large, regular customers of Hanoi Auditing Company. Therefore, the defendant issued an audit report contrary to regulations at the company's request to receive payment.
Police searched FLC headquarters at the time the case was prosecuted.
No checking, verification but still signed confirmation
Regarding ASC Auditing Company Limited, the Ministry of Public Security's Investigation Police Agency stated that the company's Deputy General Director, Ms. Tran Thi Hanh, is directly responsible for collecting records and documents to evaluate and inspect the production and business activities according to the financial reports of Faros Company.
Similar to the defendants of Hanoi Auditing Company, although the collected audit records were not sufficient, Ms. Hanh still signed and issued audit reports with fully acceptable audit opinions with the company's auditors.
In addition, Ms. Hanh was also accused of not checking and verifying the investment trusts of Faros Company, but still signed the confirmation in the company's document on the additional explanation of investment trusts sent to HoSE.
The series of actions of the female defendant helped defendant Trinh Van Quyet and his accomplices prepare a document to explain as requested by HoSE so that Faros Company could list its shares on the stock exchange, committing fraud and appropriating investors' money.
At the investigation agency, Ms. Hanh admitted her violations, but did not admit the purpose of fraud and appropriation of property. Apart from the audit fee according to the contract, the defendant did not receive any other benefits.
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