Vietnamese broker VNDirect's fund management firm fined for violations

The State Securities Commission of Vietnam (SSC) has fined IPAAM, a fund management company wholly owned by leading broker VNDirect, VND260 million ($10,370) for violations.

I.P.A Securities Investment Fund Management Company Limited (IPAAM) last Friday stated that it had received market watchdog SSC's decision on the fine.

One week earlier, the SSC Inspectorate had released an inspection conclusion related to IPAAM. Specifically, IPAAM was fined VND175 million ($6,980) for violating regulations on financial investment.

According to the conclusion, IPAAM's audited 2022 financial statement and the Q1/2023 financial statement prepared by IPAAM showed that the company's total financial investment value as of December 31, 2022 and March 31, 2023 was greater than its equity.

As of December 31, 2022, IPAAM's total financial investment value was VND137.6 billion, while its equity was VND135.6 billion. As of March 31, 2023, IPAAM's total financial investment value was VND137 billion, while its equity was nearly VND135 billion.

The SSC Inspectorate said that IPAAM used money sources other than its equity for financial investment, violating the regulations at Point a, Clause 21, Article 10 of the Ministry of Finance's Circular No. 99/2020/TT-BTC.

IPAAM was also fined VND85 million ($3,390) for appointing a person to be head of its internal audit department, but the personnel did not meet the regulations in Clause 5, Article 5 of the circular.

IPAAM was established in March 2008, operating mainly in the field of securities investment fund management and securities portfolio management.

As of December 31, 2024, the company's charter capital reached VND100 billion with the owner - I.P.A Investment Group (Hanoi Stock Exchange: IPA) -contributing 100% of the capital.

In Q4/2024, IPAAM's profit was VND23.8 billion, an increase of 955.3% over the same period last year. Its full-year profit reached VND36.6 billion ($1.46 million), 19.2 times higher than 2023.

As of December 31, 2024, the company's total assets were VND146.4 billion ($5.84 million), an increase of nearly 28% compared to the beginning of the year.

The main assets are short-term financial investments (VND96.9 billion), including short-term stock investments (VND6.2 billion VND), short-term bond investments (VND48.9 billion), fund certificates (nearly VND40 billion), certificates of deposit (VND4 billion).

IPAAM's parent company - I.P.A Investment Group - was recently found by the SSC to have made some violations: mobilizing trillions of Vietnamese dong worth of bonds (VND1 trillion = $39.87 million) but using them for wrong purposes; and illegally lending trillions of Vietnamese dong to Trustlink Company, a shareholder.

The inspection conclusion also revealed that I.P.A Investment Group issued bonds worth VND1 trillion to VNDirect, and then used this money to buy new shares of VNDirect.