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Investors despair over continuing financial fraud
While securities authorities struggle to improve management of listed firms, discrepancies when it comes to companies' financial statements and auditors' reports are continuing to muddy the waters.
As this conduct becomes more widespread, investors says they are more and more concerned about insider trading.
"Whatever the reason, our trust in the companies is lost," said securities investor Nguyen Anh Tuan.
He said that some companies tried to hide their true earnings to make it possible to defraud traders.
Nguyen Thanh Ky, general secretary of the Viet Nam Association of Securities Business, also said he was aware of insider trading in a number of listed firms.
Many auditors said the troubled economy had caused firms to lose huge sums of money which some tried to offset by fraud. Making matters worse, he said auditors had failed to pick up on the fraud.
In addition, a number of enterprises were not compulsorily audited, said an official at one of the biggest auditing firms Ernst&Young.
Meanwhile, current financial regulations were insufficient, experts said.
According to published audited financial statements for last year, profits in many companies plunged after auditing.
For example, the Viet Nam-Italy Steel Co (VIS) initially posted profits of VND110 billion (US$5.2 million). After auditing, that figure was revised down to VND27.2 billion ($1.2 million). Meanwhile, the Viet Nam General Import and Export No 1 (TH1) reported a 42.3 per cent decrease in profits, worth VND21.46 billion ($1 million).
Meanwhile, other firms saw profits increase after auditing by between 86-273 per cent, such as Thac Ba Hydropower (TBC), paper producer Dong Hai Ben Tre (DHC) and property developer Coma 18 (CIG).
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