Louis Holdings, Tri Viet Securities leaders arrested

Do Thanh Nhan, Chairman of Louis Holdings, and Do Duc Nam, General Director of Tri Viet Securities, were arrested on Wednesday for allegedly manipulating the stock market to reap windfall gains.

On April 20, Nhan, Nam, and Trinh Thi Thuy Linh, CEO of Louis Holdings, and Le Thi Thuy Lien, a financial service staff of Tri Viet Securities Company, were detained by the Ministry of Public Security’s investigative agency for further probing into alleged stock market manipulation.

The arrests took place in the context of the stock market falling for multiple sessions. VN-Index returned to the price range half a year ago when selling pressure spread from speculative small-cap stocks to mid-cap and large-cap stocks.

According to Lieutenant General To An Xo, a spokesperson for the Ministry of Public Security, from January 4 to October 6, 2021, Nhan was accused of colluding with Nam and a number of people "using multiple securities trading accounts" to buy, sell and entice others to "manipulate the stock price" of Louis Capital JSC (ticker code TGG), Louis Land JSC (BII) and other stocks. This behavior is considered illegal, earning them hundreds of billions of Vietnamese dong illegally (VND100 billion = $4.36 million).

TGG and BII are the stocks that Louis Holdings successfully acquired in 2021. TGG traded at only around VND1,900 - 2,000 a share at the beginning of 2021. However, strong cash flows continuously pushed this stock’s price to ceiling highs for multiple sessions, bringing it to the peak of VND74,800 on September 22 of the same year, an increase of nearly 64 times. However, after creating the peak, TGG continuously dropped sharply, and by April 15 this year, it traded at VND15,300, down 79.5% against the peak.

BII followed TGG by peaking at VND31,000 on September 15 last year, a rise of 8.6 times against the beginning of the same year. Later, this stock also dropped deeply with many consecutive sessions of hitting the floor. It closed April 15 this year at only VND8,300, down 73.2% compared to the peak.

In addition to TGG and BII, other listed companies with the involvement of Louis Holdings like AGM, APG, DDV or SMT also recorded consecutive ceiling gains. Popular gains were over 100%, far outpacing other stocks in the market.

In mid-September 2021, TGG's leaders sent a document to the market regulator State Securities Commission (SSC), affirming: “Louis Capital has never and will never commit acts of manipulating the stock market."

In March this year, Louis Holdings was fined more than VND160 million ($7,000) and suspended by SSC from securities trading for two months because the transaction of TGG shares exceeded the registered value. Specifically, on November 11 last year, Louis Holdings registered to buy 3.6 million TGG shares, but the actual number exceeded 4.6 million.

Louis Capital, part of the “Louis” group, was also fined VND 232.5 million for errors including violations of information disclosure, failure to ensure the required number of independent board members, and failure to appoint a person in charge of corporate governance as regulated.

Previously, on January 28, Tri Viet Securities Company (code TVB, listed HSX) was fined VND250 million for providing securities advance payment services to customers without reporting to and approval of the SSC.

This is the second case the Ministry of Public Security’s investigative agency (C01) has been probing on accusations of stock market manipulation. On March 29, C01 detained Trinh Van Quyet, former Chairman of FLC Group. After that, the police arrested Quyet’s two younger sisters, Trinh Thi Thuy Nga and Trinh Thi Minh Hue, along with Huong Tran Kieu Dung, acting Vice Chairman of FLC Group, and Nguyen Quynh Anh, General Director of BOS Securities JSC, the group's subsidiary.

From December 1, 2021 to January 10, Quyet directed some executives of the BOS Securities, FLC’s subsidiaries and other related companies, to use 20 securities accounts from 11 organizations to constantly conduct stock transactions, thereby creating fake supply and demand, according to the investigative agency.

On January 10, Quyet was discovered to have sold 74.8 million FLC shares at 22,586 per share, without informing the market in advance as required by the law, given his being the group’s chairman. After these transactions, Quyet earned VND1,689 billion, illegally pocketing more than VND530 billion (over $23 million), authorities stated.