(Luận văn) corporate fraud in the vietnam upcom stock market, a case study of the central mining, mineral exporting and importing company

t to MINISTRY OF EDUCATION AND TRAINING ng hi UNIVERSITY OF ECONOMICS HO CHI MINH CITY ep FULBRIGHT ECONOMICS TEACHING PROGRAM w n lo ad ju y th yi pl ua al ANH NGUYEN NHAT n n va fu ll CORPORATE FRAUD IN THE VIETNAM UPCOM STOCK oi m at nh MARKET: A CASE STUDY OF THE CENTRAL MINING, z MINERAL EXPORTING AND IMPORTING COMPANY z k jm ht vb l.c gm MASTER IN PUBLIC POLICY THESIS om an Lu n va ey t re th HO CHI MINH CITY - 2017 t to MINISTRY OF EDUCATION ng hi UNIVERSITY OF ECONOMICS HO CHI MINH CITY ep FULBRIGHT ECONOMICS TEACHING PROGRAM w n lo ad ANH NGUYEN NHAT ju y th yi CORPORATE FRAUD IN THE VIETNAM UPCOM STOCK pl ua al MARKET: A CASE STUDY OF THE CENTRAL MINING, n MINERAL EXPORTING AND IMPORTING COMPANY n va ll fu m oi MASTER THESIS at nh z Major: Public Policy z k jm ht vb Code: 06340402 om an Lu Thanh Nguyen Xuan l.c Prof David O Dapice gm THESIS ADVISORS n va ey t re th Ho Chi Minh City, 2017 i CERTIFICATE OF ORIGINALITY t to ng hi I hereby declare that the thesis entitled: "Corporate fraud in the Vietnam Upcom ep stock market: A case study of the Central Mining, Mineral Exporting and Importing Company" is my own original work carried out as a Master's student at Fulbright w n Economics Teaching Program (FETP) except to the extend that assistance from others in lo ad the thesis design and conception or in style, presentation and linguistic expression are duly y th acknowledged ju All sources used for the thesis have been fully and properly cited It contains no yi pl material which to a substantial extent has been accepted for the award of any other degree ua al at FETP or any other educational institution in any language fully or partly except where n due acknowledgement is made in the thesis ll fu City or FETP n va The thesis does not reflect the views of the University of Economics Ho Chi Minh oi m Hanoi, 08/09/2017 Author at nh z z vb k jm ht Nguyen Nhat Anh om l.c gm an Lu n va ey t re ii ACKNOWLEDGEMENT t to ng hi Studying in FETP seems to be the hardest way to get Master degree, however it is ep the fastest way that you can learn every things about how our society is going on I am not able to complete the coursework as well as the thesis without elegant supports by FETP w n staff, my classmates and family lo ad I would first like to thank my thesis advisor Mr Thanh Nguyen Xuan of the y th Fulbright School of Public Policy and Management at Fulbright University Vietnam He ju consistently allowed this thesis is my own work and steered me in the right direction when yi pl I lost my way Without his adjustments, I not think that I can have my own perfect ua al theoretical framework to solve a case study n I would also like to thank experts in the Committee of my thesis defense: Dr Khai n va Dinh Cong as Chairman, Dr Giang Tran Thi Que and Dr Du Huynh The as the second ll fu readers of my thesis, and I am deeply indebted to your valuable comments and corrections oi m on my thesis I very much want to thanks again Dr Du who is my second tutor in the finalize stage of my thesis His suggestion about the second framework is a brilliant idea to at nh wake me up to see what happened in the real life z I not know how to thank MPP7 members enough for your physical and mental z vb backup Many challenges and accomplishments would not have been possible without our jm ht teamwork I also have a big thank to Mr An Bui Quoc in particular, who sat next to me in k the 1st year and provide tremendous assistance to me in the finalize stage l.c gm Finally, I owe my wife a great debt of gratitude for unfailing support and continuous encouragement throughout my years of studying and researching om Hanoi, 08/09/2017 an Lu Author n va ey t re Anh Nguyen Nhat iii ABSTRACT t to ng The Central Mining, Mineral Exporting and Importing Company (MTM) is the hi ep typical case that illustrates clearly the situation of agency cost and fraudulent behaviors in the Vietnam Upcom stock market The first part reveals the weaknesses of regulation and w current policies in Vietnam by using the principal-principal agency perspective of Young n lo (2008) particularly with regard to the mechanisms of stock scanning, no controlling the ad changes of regulated capital, the undemanding capital contribution and no legal y th responsibilities of former majority shareholders The second part of thesis uses the ju yi modified fraud of triangle of Soltani (2014) as a theoretical framework with several pl adjustments to adapt the current circumstance of MTM The case of MTM shows a number al ua of fraudulent behaviors by controlling shareholders including: (1) The reconstruction of n human resource before listing; (2) Having no major shareholder - holding more than 5% of va n the chartered capital - but the power is concentrated; (3) Using the brand and pictures ll fu makes confusion with another company; (4) Increasing the regulated capital in the short oi m term; (5) No core business or production, mainly the joint venture or capital contribution; nh (6) The external audit accepted despite of the fact that financial statements have the at problems; (7) The business situation is not good but the price and volume of stock trading z z is still high; (8) Tax obligation and social insurance are not completed In conclusion, the ht vb thesis strongly recommends the policies to reduce the likelihood of expropriation of k behaviors jm minority shareholders due to the principal-principal agency conflicts and these fraudulent l.c gm Keywords: corporate fraud, fraud triangle, MTM, principal-principal agency om conflicts an Lu n va ey t re iv LIST OF ABBREVIATIONS t to ng hi Abbreviations Meaning ep BoD Board of Director HNX Hanoi Stock Exchange w Initial public offering n IPO lo Joint stock Company ad JSC Ministry of Finance yi pl MTM ju MoF Private Limited Company y th Ltd The Central Mining, mineral Exporting and Importing Joint Over-the-counter market n OTC ua al Stock Company va Statement of Financial Position SSC State Securities Commission of Vietnam PO Payment order Upcom Unlisted Public company market US The United States VSD Vietnam Securities Depository VND Vietnamdong n SFP ll fu oi m at nh z z k jm ht vb om l.c gm an Lu n va ey t re v TABLE OF CONTENT t to ng CERTIFICATE OF ORIGINALITY i hi ep ACKNOWLEDGEMENT ii ABSTRACT iii w n LIST OF ABBREVIATIONS iv lo ad LIST OF FIGURES viii y th ju LIST OF APPENDICES .viii yi LIST OF TABLES ix pl Introduction ua al Chapter Background 1.2 Thesis motivation and contribution 1.3 Research questions 1.4 Research Methodology 1.5 The structure of thesis n 1.1 n va ll fu oi m at nh z Theoretical frameworks z Chapter vb The Principal-Principal Agency Perspective 2.2 Fraud triangle k jm ht 2.1 gm Incentives/pressures 2.2.2 Fraudulent Opportunity 10 2.2.3 Attitudes/Rationalization 10 2.2.4 Transformation of Fraud triangles 10 Chapter The weaknesses of regulations in Upcom market 13 om l.c 2.2.1 an Lu n va 3.2 No scanning fraudulent companies in the Upcom market 15 3.2.1 The easy and quick process to be listed 16 ey Overview of regulatory framework in the Vietnam stock markets 13 t re 3.1 vi t to 3.2.2 Audit companies are not the market guardians 17 3.2.3 Ranking is not enough 17 ng hi ep 3.3 The increase of the registered capital without controlling 19 3.4 The undemanding capital contribution 20 w The capital contribution through investment 20 3.4.2 The capital contribution though invoices 21 n 3.4.1 lo ad The legal responsibilities of former majority shareholders 21 y th 3.5 yi Overview of MTM 23 pl 4.1 The fraudulent behaviors that led to the collapse of MTM 23 ju Chapter al Stealing the brand name of unlisted company 23 4.1.2 No tax payment 25 4.1.3 A ghost company and its address 25 4.1.4 Be a public company 26 n n va ll fu oi m Fraudulent opportunities 28 at nh 4.2 ua 4.1.1 The capital contributions 29 4.2.2 Fake invoices and manipulating the financial statements 30 z 4.2.1 z ht vb Incentives 34 jm 4.3 The high profit in the harsh economic 35 4.3.2 Selling the stock of the valueless company 36 4.3.3 The collusion of the former BoD 37 k 4.3.1 om l.c gm Ethical problems 40 4.5 The fraudulent behaviors in the case of MTM: 42 an Lu 4.4 5.2 Policy recommendations 43 5.3 Limitations 44 ey Conclusion 43 t re 5.1 n Conclusion, policy recommendation, limitation 43 va Chapter vii References 45 t to Appendix Market capitalization of the Upcom market since 2013 to 1st quarter 2017 ng 47 hi ep Appendix Appendix w The detail of Market Capitalization and trading value on the Upcom 48 n market The trading detail of MTM stock 47 lo ad Appendix The reform of Vietnam in Business report over time 49 y th Appendix ju The business license of MTM 52 yi Appendix The highlighted fraudulent cases in the Vietnam stock market 49 pl n ua al n va ll fu oi m at nh z z k jm ht vb om l.c gm an Lu n va ey t re viii LIST OF FIGURES t to ng hi Figure Market capitalization of the Upcom market since 2013 to 2rd quarter 2017 ep Figure 2.Trading value and volume of the Upcom market annually Figure Principal-agent conflicts versus Principal-principal conflicts (Young, Peng, w n Ahlstrom, Bruton, & Jiang, 2008) lo ad Figure Classification of incentives for fraud-committing y th Figure Fraud Triangle 11 ju Figure Modified Fraud Triangle 11 yi pl Figure The components of ethical problems 11 ua al Figure The modified fraud triangle with several adjustments 11 n Figure Legal Matrix System 14 n va Figure 10 The timeline of the MTM collapse 27 ll fu Figure 11 The continuous process of selling and issuing stocks of FID and MTM 34 oi m Figure 12 Trading price and volume of MTM stock since 15/4 to 20/6/2016 37 at nh LIST OF APPENDICES z Market capitalization of the Upcom market since 2013 to 1st quarter 2017 z Appendix jm ht vb 47 The trading detail of MTM stock 47 Appendix The detail of Market Capitalization and trading value on the Upcom market 48 Appendix The reform of Vietnam in Business report over time 49 Appendix The highlighted fraudulent cases in the Vietnam stock market 49 Appendix The business license of MTM 52 k Appendix om l.c gm an Lu n va ey t re 38 the partners under the cover of the deposit, capital contribution Then the leaders of MTM t to will retract and appropriate the asset of company The details of tactic are below: ng Table 15 The money transactions to another companies/bank of the former MTM BoD hi Company Value ep 114,893,694,400 Vietnam Enterprise Method Transferring money (including 09 PO of year 2014 and 03 PO of year 2015) w Investment and Company (FID) with the value upto 85,005,646,143 VND To deal with the remaining, lo to buy the purchase invoices of FID y th n Development Joint Stock ad ju FID automatically delete the liability yi pl and does not confirm and reconcile ua al this liability with MTM Even though, n CEO and Chief accountant of FID va not endorse these accounting entries n Mining Transferring money (including 12 PO, ll Each PO equals 10 billion VND) to oi m Metallurgy JSC and 120,000,000,000 fu BacCan Zinc project in Sao Sao of BacCan at nh the capital contribution of the Lead- z However, the CEO confirmed that z ht vb that amount of money was withdrew commercial and 60,000,000,000 gm investment JSC (VCI) Transferring money to deposit the k Vietnam jm and paid back received However, CEO of VCI l.c confirmed that paid the cash back for om Mr Duong Dai Vu - CEO MTM This is the amount of money that sold and take cash the investment in the KSS stock of an Lu MTM sold the stock of KSS 20,077,130,000 n ey t re in the stock securities, Mr Duong Vu va MTM Checking the stock statement 23 Including: (1) Mr Cuong Le Van - the former Chairman of BoD, (2) Mr Duong Vu Dai - the former member of Bod and CEO, (3) Mrs Thuy Thai Thi Hong - The former member of BoD and vice president, (4) Mrs Van Duong Thi - The former member of BoD and chief accountant 39 Dai had withdrawn and t to misappropriate that amount of MTM ng Cash in hand on 31/12/2014 59,567,008,776 This is the cash in hand according to hi ep the cash report on 31/12/2014 Mr Duong Vu Dai and Mrs Thuy Thai w Thi Hong misappropriate that amount n lo money of MTM ad Withdrawing cash at bank 3,500,000,000 Mr Duong Dai Vu had withdrawn y th and misappropriated from MTM ju 12,832,000,000 yi Withdrawing cash at bank Mrs - Chief misappropriated from 200,000,000 Mrs Loan Tong Thi - the former staff va misappropriated from MTM n fu 280,284,000 Mrs Trang Nguyen Thi - the former ll m staff misappropriated from MTM oi 3,300,000,000 Mrs Vinh Vu Thi - the former staff misappropriated from MTM at nh Withdrawing cash at bank Thi MTM n ua al Withdrawing cash at bank Duong accountant pl Withdrawing cash at bank Van z 394,450,117,176 z Total vb Source: The petition of Phuong Chu Danh that sent to A92, the Supreme People's Procuracy of Vietnam ht jm Thus, the other fraudulent behavior is that the management of company focused on k the small number of individuals with the dominant power and collusion This characteristic gm has the same point with Mark S.Beasley, the non-fraud companies has more the percentage l.c of outside member significantly than the fraud And the more outside director, the less om likelihood of financial statement fraud decrease (Beasley, 1996) The relationship between an Lu the CEO and the BoD was so collusive that there was no room for implementing the control environment which reflects a supportive attitude towards internal control at all ey t re the shareholders n member related to the influential position of the CEO who was representing the majority of va times This collusion either resulted from the family relationship between CEO and BoD 40 4.4 Ethical problems t to According to Soltani, "the greater the incentive or pressure, the more likely an ng individual will be able to rationalize fraud" (Soltani, 2014) With the fraudulent amount of hi ep hundreds of billions, all members of the former and new leaders will try to find out the most efficient fraudulent ways which have the least damage According to the research of w Soltani for six big companies from United State and Europe, all scandals have the poor n lo ethical climate and lack of commitment to ethical principles and deontology within them ad (Soltani, 2014) The companies that run by families (Healthsouth, Parmalat, Royal Ahold) y th has the "clan" characteristics and the decisions were made on the personal actions ju yi In MTM, the company is manipulated by a small number of people These people pl have ethical problems because they use the MTM as a tool to fraud all investors al ua Understanding the ethical climate and business ethics in Vietnam, they reinforce the n culture of individual interest, intimidation, abuse of trust, domination, abuse of power va n Through the petition of Phuong Chu Danh, he asks for help because he was threatened to ll fu death if he continued providing the evidence for the investigation team They warn him oi m that his efforts are hopeless due to their overwhelming ascendancy If he ended the MTM nh proceeding, he would receive the investment back They not only lobby their "clan" but at also have impact on a new factor to be sure that MTM would be abolished That is the z z reason why "the firms that lobby have a significantly lower hazard rate of being detected jm regulators" (Yu & Yu, 2012) ht vb for fraud, evade fraud detection 117 days longer, and are 38% less likely to be detected by k In the thesis' perspective, ethic climate in Vietnam is the negative factor for gm minority investors The conflicts of interests between the minority and majority investors l.c solve in the unfair ways As a result, the damage often belongs to the smaller due the om potential information asymmetry, the abuse of power, abuse of trust (frequently in the an Lu financial statement) and the lobby culture As shown in the table 17, the concern is that no shareholders own more the 5% of ey common characteristic of the fraud firm in Vietnam Holding less than 5% of the total t re Van Duong Thi holds 100.000 stock (0.32%) No majority shareholder is one of the n members not hold any stock of the company that they owned Only the chief accountant va the company's stock No organizations or funds hold the stock of MTM Even the board 41 stock number would help trading more rapidly without the public disclosure Although the t to stock seems to be scattered but the real owners are still the former BoD hi Category The number of shareholder shares 103 31.000.000 _ _ 103 31.000.000 _ _ _ _ _ _ _ _ _ _ _ _ 31.000.000 ep The number of va ng Table 16 The structure of the shareholders in MTM domestic w The n lo shareholder ad Institution y th Individual ju The foreign yi Rate 310.000.000.000 100% _ _ 310.000.000.000 100% pl shareholder Value (VND) al ua Institution n Individual 103 n Total 310.000.000.000 100% ll fu (Source: The list of shareholder provided by VSD on 12/08/2015) oi m 4.2 The shareholders hold more than 5% of the shares: None nh According to the 2016 Prospectus, all new leaders of MTM are too young to at go steady in the mining business Most of them have no experience in the core business of z z MTM and not have any share of MTM (table 12) They seem to be puppets which were vb controlled by the force behind the scene ht Birth Year Degree/ Working experience 17/101983 Bachelor of Banking/Sale Truong Nguyen Le 21/08/1980 Bachelor of Banking Phung Nguyen The 02/07/1987 Bachelor of Banking Nhat Thai Khac 19/05/1983 Bachelor of Technical Engine Thanh Le Tien 31/12/1989 High School Bachelor of Language http://s.cafef.vn/mtm-189734/nhung-nhan-vat-chu-chot-dang-sau-viec-mtm-bien-mat-chi-sau-2-thang-len-san.chn ey 17/12/1982 t re Bachelor of Language n 07/04/1984 va Bachelor of Economics an Lu Thu Nguyen Dao om Executive Committee Trung Ly Quoc l.c Tiep Tran Huu Cong Phung Thanh 12/09/1979 24 gm Board of Director Name k Position jm Table 17 The characteristics of new leaders of MTM24 42 4.5 The fraudulent behaviors in the case of MTM: t to According to the analysis of the fraud triangle, the controlling shareholders showed ng some fraudulent behaviors that the controlling shareholders exploited the rights and hi ep interests of minority shareholders: (1) The reconstruction of human resource before listed; (2) Having no major shareholder - holding more than 5% of the chartered capital - but the w power is concentrated; (3) Using the brand and pictures makes confusion with another n lo company; (4) Increasing the regulated capital in the short term; (5) No core business or ad production, mainly the joint venture or capital contribution; (6) The external audit accepted y th despite of the fact that financial statements have the problems; (7) The business situation is ju yi not good but the price and volume of stock trading is still high; (8) Tax obligation and pl social insurance are not completed al Table 18 The fraudulent behaviors in the case of MTM ua The fraudulent behaviors The reconstruction of human resource Legal The role of investor va Prudent n fu before listed Having no major shareholder - holding Legal Prudent ll Public Policy n # at nh but the power is concentrated oi m more than 5% of the chartered capital - Using the brand and pictures makes Intervene z z confusion with another company Increasing the chartered capital in the Legal Prudent jm ht short term No core business or production, Legal gm mainly the joint venture or capital l.c contribution Enhance the fact that financial statements have capacity of financial the problems statements analysis Detecting Prudent of price and volume Tax obligation and social insurance Public disclosure are not completed Update information ey t re is still high n the price and volume of stock trading the unusual volatility va The business situation is not good but Intervene- the an Lu The external audit accepted despite of Intervene om Prudent k vb Prudent 43 Chapter Conclusion, policy recommendation, limitation t to 5.1 Conclusion ng MTM is the typical case that has the larger number of fraudulent behaviors in the hi ep Upcom market in Vietnam By the buying the small-capital company, manipulating the financial statements, issuing valueless stocks and selling in the Upcom, majority w shareholders expropriated dispersed investors If the price of stock fell to the extreme low n lo price, the group of scammers would buy back up to 75% of the regulated capital to the ad bankruptcy procedure However, minority investors sue their violations and coordinate y th with regulatory agencies to take their investment back This is the first time that the ju yi investors take the active role for their property rights instead of waiting the response of the pl regulatory bodies al ua The weaknesses of regulation in Upcom market leaves the doors open for n fraudulent behaviors In addition, the principal - principal agency problems are main va n reasons that led to the collapse of MTM The collusion of controlling shareholders, audit ll fu company and authority agencies damaged the wealth of minority shareholders oi m With all fraudulent behaviors mentioned above, some contents could be intervened nh by public policies Not only the roles of the SSC and other stock agencies, the coordination at with other regulatory bodies would help prevent the fraudulent companies and strengthen z z minority investor protections The thesis highly recommends HNX to adjust the Circular ht vb 180/2015/MoF with the mandatory equity report Additionally, HNX and other agencies k and the rise of the regulated capital jm need to establish the mechanism to control the activities that related to capital contributions Policy recommendations om l.c gm 5.2 To reduce the likelihood of expropriation of minority shareholders due to the an Lu principal-principal agency conflicts, the thesis highly recommend establishing a new mechanism to control the capital contribution and changes of regulated capital Publishing ey one suggestion from the thesis's perspective The rapid rise of regulated capital seems to be t re The adjustment in the Circular 180/2015/MoF with the mandatory equity report is n majority shareholders and minority shareholders va the contracts or essential material is a good way to reduce asymmetric information between 44 a common characteristic of fraudulent company If the authority agencies have clear vision t to of this process, this kind of company would not be listed in Upcom market ng According to the list of fraudulent behaviors, HNX should put more criteria to scan hi ep stocks in Upcom market Although these efforts require more resources, it would help eliminate the ghost companies as a way to protect minority shareholders In addition, it w would raise the concern and awareness among investors n lo ad 5.3 Limitations y th The thesis based on one case scenario so that the scale is small The case is the firm ju yi trading on the Upcom so could not extrapolate the results to the HNX and HOSE pl The framework modified the fraud triangle by author Soltani (2014) so that the al ua behaviors of investors are limited in the analysis The trend of modern microeconomics is n moving to irrational assumptions va n The case of MTM is the long observation from 2014 up to now However, the ll fu investigation of MTM have not finalized yet The allegations and indemnities for the oi m related parties have not been disclosed and have affected policies not yet implemented nh Therefore, the direction of research company MTM is opened for further research at The Chinese and Vietnamese stock markets have some companies that showed z z similar fraudulent behaviors Investor fraud cases are also common in China and there is a ht vb lot of documentation and analysis However, these materials are mainly in Chinese and not jm widely available, it is difficult to access these materials directly but through another study k Increasing the corporate governance is the vital solutions to again the financial gm 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2,083,596,377 31,946,170,700.10 n 25,745,261,743.88 80,115,446 lo ad 2014 y th 2015 ju yi 2016 pl 356,794,930,434.02 2,945,976 63,642,861.50 ua al 2017 n Appendix The trading detail of MTM stock Cap ll fu oi m Average Sum at z z vb k jm gm om an Lu Val 729 2,955 3,174 4,678 8,985 6,319 4,351 3,615 9,701 5,039 8,202 8,438 4,962 5,303 5,402 6,607 4,011 4,094 5,140 3,276 3,437 3,994 4,902 n va ey t re Vol 114,000 462,100 488,300 657,000 1,151,400 747,000 560,000 526,500 1,620,600 802,700 1,358,000 1,437,900 951,300 1,025,300 1,103,700 1,260,600 789,000 834,400 1,183,200 801,600 949,500 996,400 1,104,800 l.c 6,391 6,393 6,501 7,120 7,804 8,459 7,769 6,883 5,986 6,280 6,043 5,870 5,216 5,172 4,894 5,241 5,084 4,911 5,000 4,127 3,621 4,008 4,436 ht 456 205 226 229 251 270 226 208 183 189 189 174 158 155 155 164 155 146 130 115 108 127 140 nh 114,000 462,100 488,300 657,000 1,151,400 747,000 560,000 536,500 1,620,600 802,700 1,358,000 1,437,900 951,300 1,025,300 1,103,700 1,260,600 789,000 834,400 1,183,200 801,600 949,500 996,400 1,104,800 Value (Mil VND) 729 2,955 3,174 4,678 8,985 6,319 4,351 3,693 9,701 5,039 8,202 8,438 4,962 5,303 5,402 6,607 4,011 4,094 5,140 3,276 3,437 3,994 4,902 n 15/04/2016 19/04/2016 20/04/2016 21/04/2016 22/04/2016 25/04/2016 26/04/2016 27/04/2016 28/04/2016 29/04/2016 4/5/2016 5/5/2016 6/5/2016 9/5/2016 10/5/2016 11/5/2016 12/5/2016 13/05/2016 16/05/2016 17/05/2016 18/05/2016 19/05/2016 20/05/2016 Volume va Date 48 t to ng hi ep w n lo ad ju y th 1,033,700 1,868,600 3,320,800 337,400 1,637,400 2,202,100 1,382,600 946,400 2,395,700 1,045,600 1,948,800 1,315,500 1,860,900 4,283,700 1,145,100 4,267,100 3,100,400 6,062,700 7,012,800 2,025,400 yi pl ua al n 4,300 6,855 11,932 1,228 5,376 7,230 4,395 2,982 7,673 3,269 5,920 3,823 5,392 11,983 3,225 11,728 8,317 16,225 18,808 5,293 121 115 108 115 102 99 99 96 102 96 90 90 93 90 87 84 84 84 87 81 81 n va ll fu 4,185 3,593 3,640 3,283 3,285 3,178 3,153 3,202 3,128 3,051 2,898 2,797 2,817 2,749 2,683 2,676 2,682 2,615 1,033,700 1,868,600 3,320,800 337,400 1,637,400 2,202,100 1,382,600 925,500 2,395,700 1,045,600 1,948,800 1,315,500 1,860,900 4,283,700 1,145,100 4,267,100 3,100,400 6,062,700 7,012,800 2,025,400 4,300 6,855 11,932 1,228 5,376 7,230 4,395 2,907 7,673 3,269 5,920 3,823 5,392 11,983 3,225 11,728 8,317 16,225 18,808 5,293 oi m 23/05/2016 24/05/2016 25/05/2016 26/05/2016 27/05/2016 30/05/2016 31/05/2016 1/6/2016 2/6/2016 3/6/2016 6/6/2016 7/6/2016 8/6/2016 9/6/2016 10/6/2016 13/06/2016 14/06/2016 15/06/2016 16/06/2016 17/06/2016 20/06/2016 at nh Appendix The detail of Market Capitalization and trading value on the Upcom market z Market Cap Value Vol Value jm ht Vol vb Month Agreement z Matching 414,645,567,287 16,842,498 391,455,235.8 21,576,141 Dec-16 303,359,258,269 106,939,012 2,427,764,215.8 136,721,634 1,912,950,052.3 Nov-16 253,096,766,377 95,622,061 1,963,136,238.9 54,248,405 1,206,691,203.9 Oct-16 151,159,608,532 78,614,623 939,377,077.6 56,658,617 922.288.641,5 Sep-16 117,682,186,519 66,951,691 839,135,575.5 69,625,495 1,176,442,895.8 Aug-16 112,146,738,476 73,105,125 1,027,566,059.1 47,478,050 918,108,824.9 Jul-16 109,677,138,630 85,405,808 1,326,819,371.3 50,373,223 1,023,230,749.3 Jun-16 111,185,970,845 177,970,918 2,206,891,659.0 66,628,901 1,179,937,476.3 May-16 108,453,093,826 100,154,958 1,059,978,042.4 44,539,121 708.676.820,8 Apr-16 100,661,229,869 149,292,586 1,546,895,494.3 66,131,378 1,060,428,757.8 Mar-16 104,787,559,734 180,504,686 1,896,724,094.1 133,575,299 3,161,773,359.3 Feb-16 68,442,486,132 53,859,343 529,288,569.4 25,569,711 409,160,770.5 k Jan-17 239,560,426.7 om l.c gm an Lu n va ey t re 49 t to Appendix The reform of Vietnam in Business report over time ng hi Year of Doing ep The content of reform in minority investor protections25 Bussiness report easier to sue directors in cases of prejudicial transactions amongst n Vietnam strengthened minority shareholder protections by making it w DB 2017 lo ad interested parties, by increasing shareholder rights and role in major ju y th corporate decisions, by strengthening the ownership and control structures of companies and by increasing corporate transparency yi requirement pl Vietnam strengthened an investor protection by introducing greatere ua al DB 2014 disclosure requirements for publicly held companies in cases of n n va related-party transactions Vietnam strengthened investor protections by requiring higher fu DB 2012 ll standard of accountability for company directors m Vietnam strengthened investor protections by increasing disclosure oi DB 2008 nh requirements for bot regular and related-party transactions at z z vb Appendix The highlighted fraudulent cases in the Vietnam stock market Value HOSE: Controling this stock price to PPC underbuy PPC in IPO, the million of gm Thermal Reason k 11/2015 Pha Lai Market jm Name ht Time PPC stocks l.c investigation agency prosecuted caused a loss of Station JSC Mai Pham Thi Tuyet, Former around 89 Director of CTS, due to the billion VND of manipulating stock prices and the national caused a loss Hieu Duc Nguyen, budget om Power an Lu ey http://www.doingbusiness.org/Reforms/Overview/Topic/protecting-minority-investors#vietnam accessed on 25/03/2017 t re 25 n sercurities were involved va Vice Director of VIBank and AGR 50 t to Snow White HOSE: IN 2007, BBT announced a boost 7/8/2009, HSX 2009 Cotton JSC BBT to profits, however the company delisted 6.84 suffered heavy losses due to the million shares inefficient business A way of of BBT and all hiding the financial losses was of investors had accounting tricks by the tone of suffered losses ng 2007- hi ep w n lo the top This case raised awareness ad of a transperancy in a financial y th ju La Nga OTC: Misuse of funds by former 17.7 billions Sugar SJC DuongLa director He used cash in hand VND yi 4/2008 report of SJC pl al and bank to invest in stock ua NGa n markets but had lost HOSE: fu Environment AAA The increase of the market price of Stock Securities n Green va 9/2010 AAA stock from 43.000 to around cannot sell off ll 90.000 dong attracted many VIP JSC investors With the extreme high margin liquidity in the long period and at accounts oi m and Plastic at nh z Most of z the peak prices, Most of AAA vb shares distributed to public after investors ht suffered intense result, the market price had fallen losses k jm the successful manipulation As a Son Truong Duy, Chairman of 9/2011 Stock HASC, has escaped with the debts securities up hundreds of billions VND Company Dragon KLS in Vietnam stock market, KLS stopped the business that related to Securities stock ey Stock t re As one of the largest capitalization n HNX: va Golden an Lu Ha Thanh om 06- l.c gm rapidly 3/2011 AAA shares in 51 Company t to 12/2011 NgheAn UPCOM: PVA announced the stock issuing There was a PVA plan to public After an aggressive trick of issuers Vietnam propest of minority investors by without the Construction selling all their shares, PVA control of law SJC cancelled this plan and the market or HNX ng Petro- hi ep w n lo price increased right after that So ad those who sold had suffered y th ju Vien Dong HOSE: This is particularly the case for all Pharma JSC DVD negative characteristics of the yi 2011 losses pl al ua stock market n including: in Vietnam market n va manipulation, fraud price financial fu statements; scam investors and ll One investor found out that KTB, KTB which is the listed company in at Mineral JSC Upcom: nh 04/2016 Tay Bac oi m unfair business z z Upcom, did not exist Right after vb that, KTB was suspended trading According to the information om l.c transactions with MTM gm above, KTB had many fake k jm ht by HNX an Lu n va ey t re 52 Appendix The business license of MTM t to ng hi ep w n lo ad ju y th yi pl n ua al n va ll fu oi m at nh z z k jm ht vb om l.c gm an Lu n va ey t re