The front gate of the Hà Nội People's Procuracy. The procuracy office has prosecuted former chairwoman of the Bình Thuận Mineral Industry JSC and her partners for stock manipulation. - Photo vkshanoi.gov.vn
HÀ NỘI – The Hà Nội People’s Procuracy has prosecuted the former chairwoman of the Bình Thuận Mineral Industry Joint Stock Company for price manipulation.
Phạm Thị Hinh is charged with creating fake accounts to drive shares of the company up and earn profits from selling them to other investors, local media have reported based on the procuracy’s indictment.
The company debuted on the Hồ Chí Minh Stock Exchange on July 27, 2010. However, its shares fell deeply in the same period from a debut price of VNĐ40,000 (US$1.72) per share to VNĐ400 per share before HoSE eliminated the company from the stock market by force on August 2, 2018.
The company’s performance also declined during the period from VNĐ65 billion ($2.8 million) profit in 2010 to VNĐ12 billion profit in 2017. The result for 2018 has not yet been announced.
The firm increased its charter capital to VNĐ934 billion in 2015 from the initial figure of VNĐ129 billion. To increase the company’s charter capital, Hinh and three partners issued an additional 56 million shares.
To keep share price stable and increasing, they created 69 trading accounts in different securities firms, some of which were made at VSM Securities JSC – a company Hinh also chaired.
They planned to conduct internal trades to drive share price and liquidity up, thus attracting individual investors.
The defendants, from the end of 2015 to July 8, 2016, caused total losses of VNĐ8.1 billion for nearly 1,500 individual investors that were tricked. Three securities companies that lent to the four defendants suffered a loss of VNĐ761 million.
Up to now, 124 victims and three securities firms have demanded compensation totalling VNĐ3 billion.
The Hà Nội People’s Procuracy said in its indictment that the two firms Bình Thuận Mineral Industry JSC and VSC Securities JSC were not involved in the case as Hinh was the one responsible for planning the crime.
Stakeholders in the case declined to comment. Market members, securities firms and regulators also declined to comment, stating the topic was too sensitive to talk about.
This is the second case brought to court for stock price manipulation. The previous case was the Central Mining and Mineral Import Export Joint Stock Company (MTM), in which defendants were accused of stock manipulation and fraudulent transfers to earn VND56 billion illegally for share trading.
The main defendant, MTM’s former chairman, was sentenced to life in prison. Others were sentenced to a maximum of 30 years. – VNS