The State Securities Commission of Vietnam (SSC) has imposed the highest possible fine of VND1.5 billion (US$65,850) on Trinh Van Quyet, chairman of local conglomerate FLC, for his unannounced sale of FLC shares.
|Trinh Van Quyet, chairman of FLC Group – PHOTO: VNA|
The decision was made on January 18 in accordance with Government Decree 128 on sanctions against violations in stock trading that took effect early this year.
The decree stipulates that those infringing stock trading rules will be fined at least VND5 million or 3-5% of the value of transactions worth over VND10 billion but no more than VND1.5 billion. Besides, Quyet is banned from making stock transactions for five months.
Quyet registered to sell 175 million FLC shares to reduce his ownership in the company from 30.34% to 5.7%. However, the SSC only received a report of his transaction at 5:45 p.m. on January 10. By then, Quyet had already sold 74.8 million FLC shares.
The Hochiminh Stock Exchange has canceled the FLC chairman’s sale of 74.8 million FLC shares due to his failure over pre-transaction information disclosure.
Prevailing regulations require major shareholders to announce their share plans in advance.
Since then, a host of stocks linked to FLC Group such as ROS, AMD, KLF and HAI have dropped sharply for seven consecutive sessions.
This is the second time that Quyet has been fined for violating stock trading regulations. In November 2017, Quyet was fined VND65 million for selling 57 million FLC shares without announcing his sale in advance.
At that time, the FLC shares were sold at VND7,100-7,700 each. After Quyet’s transaction, FLC lost approximately 10%.
The move to block the securities account of FLC Group chairman Trinh Van Quyet for failing to disclose stock sales in advance has triggered a debate around the equity market’s transparency and conflict-of-interest rules.