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Former mining firm chairwoman prosecuted for stock manipulation
The Ha Noi People’s Procuracy has prosecuted the former chairwoman of the Binh Thuan Mineral Industry Joint Stock Company for price manipulation.
Pham Thi 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 Ho Chi Minh Stock Exchange on July 27, 2010. However, its shares fell deeply in the same period from a debut price of VND40,000 (US$1.72) per share to VND400 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 VND65 billion ($2.8 million) profit in 2010 to VND12 billion profit in 2017. The result for 2018 has not yet been announced.
The firm increased its charter capital to VND934 billion in 2015 from the initial figure of VND129 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 VND8.1 billion for nearly 1,500 individual investors that were tricked. Three securities companies that lent to the four defendants suffered a loss of VND761 million.
Up to now, 124 victims and three securities firms have demanded compensation totalling VND3 billion.
The Ha Noi People’s Procuracy said in its indictment that the two firms Binh Thuan 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.
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