Construction of a building near Bến Thành Market by Viva Land, a subsidiary of Vạn Thịnh Phát Group, stalled at the end of 2022 following the arrest of the chairwoman of Vạn Thịnh Phát group. — VNS Photo Bồ Xuân Hiệp

HCM CITY — Multiple companies associated with property developer Vạn Thịnh Phát, whose chairwoman has been sentenced to death for financial fraud, have accumulated a total of VNĐ52.4 trillion (over US$2 billion) in bond debt, with more than 30 per cent of the amount currently overdue for repayment.

According to a report by the Ministry of Finance, 24 firms linked to the group have issued over VNĐ138.2 trillion in corporate bonds to raise capital. Only VNĐ85.7 trillion had been repaid towards the principal debt as of the end of 2023.

Among them, An Đông Investment Group Joint Stock Company leads in outstanding debt with over VNĐ25 trillion, followed by other companies such as Bông Sen, Quang Thuận, and Saigon Investment & Development.

These companies had previously been fined for fraud related to bond issuance and trading amounting to trillions of Vietnamese đồng.

The State Securities Commission (SSC) imposed fines on the companies for failing to submit essential information to the stock exchange, resulting in penalties for violations.

Investors who were promised repayment by Tân Việt Securities, the bond issuer and consultant for these companies, have not received any payments, including principal and interest, since the chairwoman’s arrest in late 2022.

A local court in HCM City recently sentenced Trương Mỹ Lan, the group’s chairwoman, to death for multiple financial frauds. She has also been accused of bond fraud involving billions of dollars through fraudulent activities.

Efforts are being made to locate over 42,000 bondholders of corporate bonds issued by the group’s companies.

The corporate bond market is facing challenges as experts have warned repayment pressure will persist this year and in coming years due to financial hurdles faced by issuers, especially property developers.

Measures have been taken by the Ministry of Finance to ensure timely payments by issuers, with actions against auditors who provide subpar audit reports.

The Vạn Thịnh Phát-SCB scandal has significantly impacted investor trust in the market, leading to sell-offs and requests for businesses to repurchase bonds early.

A trial related to bond frauds linked to the group is scheduled to begin in the city this year, according to the police.

Prime Minister Phạm Minh Chính has ordered the central bank and the Finance Ministry to enhance supervision of bond defaults to revitalise the troubled market. — VNS