Effects of the arrest of FLC’s chairman to stock market are not much

According to State Securities Commission, investors should calm down to have an objective view. Source: Internet

Investors should calm down to have an objective view

On March 29, 2022, the Investigative Police Agency of the Ministry of Public Security issued the decision to prosecute and arrest Trinh Van Quyet; at the same time, organize to search the residences and workplaces at 21 locations for related subjects.

The prosecution of a criminal case and the accused is to conduct an investigation and verification against Trinh Van Quyet, Chairman of the Board of FLC Group, individuals of FLC Group Joint Stock Company, BOS Securities Joint Stock Company and related companies on the act of "Manipulating the stock market", "Concealing information in securities activities" that occurred on January 10, 2022, causing serious damage to investors, affecting the operation of Vietnam's stock market.

Mr. Tran Van Dung, Chairman of the State Securities Commission of Vietnam (SSC), said that as soon as the Investigation Police Agency of the Ministry of Public Security announced the official information, the SSC immediately held a meeting to carry out the next task under the assigned authority, functions and tasks.

The SSC requested FLC Group to disclose information in accordance with regulations and report to the SSC and the Stock Exchange in accordance with the law.

Also on the evening of March 29, the SSC published official information on its website and sent it to press agencies and newspapers about this incident, accordingly, the SSC recommended investors calm down and analyze in order to fully recognize the macro factors and actual operations of enterprises to take caution when making investment decisions.

Leaders of the SSC said that regarding this incident, the leaders of the Ministry of Finance also gave drastic, clear and specific instructions to the SSC and related agencies under the Ministry.

“The leadership of the Ministry asked SSC to continue to work with the investigation agency in the spirit of respecting the law, strictly complying with the provisions of the law, maintaining discipline and transparency of the stock market. This was also the spirit of the SSC in this case, we would continue to closely coordinate with the investigating agency following its assigned functions, competence and tasks," Tran Van Dung said.

According to the leader of the SSC, it is inevitable that the information related to Trinh Van Quyet affects investors' psychology, however, those impacts on the stock market are only short-term due to the capitalization value of FLC, as well as the companies in the FLC ecosystem account for a small value in the market.

The market capitalization of FLC, as well as the companies in the FLC ecosystem, account for about 0.16% and 0.35% of the total market capitalization, respectively.

Vietnam's stock market is still evaluated positively

According to Tran Van Dung, although it may have many fluctuations due to objective factors, Vietnam's stock market is still evaluated positively from factors such as macroeconomic fundamentals and good internal factors.

In the first quarter of 2022, the domestic macroeconomic indicators are still very positive and Vietnam is still highly appreciated by major international financial institutions for this year's economic growth. Along with that, in the context of the strong impact of the Covid-19 pandemic, the business results of enterprises are still positive.

Besides that, Vietnam's stock market still has many other supporting factors such as cash flow, the expectation of upgrading to an emerging market, equitization, capital divestment, etc.

“As for the regulatory agency, under the direction of the Ministry of Finance, besides important solutions for stabilizing the development of the stock market, we would continue to strengthen the transparency, discipline and support to promote the sustainability of the market in 2022 and the coming years," the SSC leader said.

Regarding this issue, on March 30, Deputy Prime Minister Le Minh Khai directed the implementation of measures to ensure the stock market operates stably, safely, smoothly, openly and transparently.

Accordingly, the Deputy Prime Minister requested the Minister of Finance and the Chairman of the SSC to direct competent agencies and units to actively supervise and closely monitor the developments of domestic and international stock markets, capital flows of the market to proactively have solutions to manage and supervise the stock market in an appropriate, timely and close manner to the situation, ensuring safety, transparency and stability of the stock market, avoiding risks.

Moreover, proactively disclosing information and implementing solutions to stabilize investor sentiment at home and abroad, and protect investors' legitimate interests.

At the same time, speeding up the review of mechanisms and policies and completing the legal framework related to handling violations in the field of securities and the stock market in order to have strong sanctions and deterrents, ensuring the transparency and health of the stock market.

Along with that, the Deputy Prime Minister requested the agencies to base on their assigned functions and tasks to actively handle cases and violations on the stock market in accordance with the law, ensuring the stock market's operation.

Previously, on January 10, 2022, Trinh Van Quyet, Chairman of the Board of Directors of FLC Group, sold 74.8 million shares of FLC without disclosing information before carrying out the transaction in accordance with Circular 96/2020/TT-BTC.

SSC decided to block the securities account of Trinh Van Quyet in order to prevent further acts that did not comply with regulations.

On January 11, the Ho Chi Minh Stock Exchange canceled the transaction of selling 74.8 million FLC shares on January 10 by Mr. Trinh Van Quyet. On January 18, 2022, the SSC issued Decision No. 34/QD-XPHC sanctioned Trinh Van Quyet VND1.5 billion; at the same time suspending securities trading activities of Trinh Van Quyet for five months.