Vietnamese billionaire tycoon found guilty of defrauding stockholders, sentenced to 21 years

Trinh Van Quyet, a prominent Vietnamese business tycoon, is escorted to a court for his trial of defrauding stockholders, in Hanoi, Vietnam, July 22, 2024. (AP Photo/Anh Tuc)

HANOI, Vietnam — A prominent Vietnamese business tycoon was found guilty Monday of defrauding stockholders of nearly US$150 million by falsely inflating the value of his company, in a case that comes as the government cracks down on widespread corruption in the country.

The Hanoi People’s Court sentenced Trinh Van Quyet, 48, to 21 years in prison after a two-week trial that included 49 defendants who were named as accomplices, state-run VN Express reported. It was not immediately clear whether Quyet, who was arrested in 2022, would appeal.

The billionaire was the chairman and founder of the FLC Group, which owns the discount Bamboo Airways and has broad real estate holdings including hotels, resorts and golf courses, among other assets.

According to the indictment, Quyet fraudulently inflated the value of the group's general contractor subsidiary, FLC Faros, by reporting fictitious capital contributions, before taking the company public in 2016.

In the initial public offering, the company sold some 391 million shares to about 30,000 investors, defrauding them of 3.6 trillion Vietnamese dong (about US$144 million) according to the indictment. Quyet's co-defendants included multiple officials accused of being complicit in the scheme by approving and facilitating the initial public offering despite knowing of discrepancies in the figures.

All co-defendants were found guilty of various charges, with sentences ranging from probation to multiple years in prison.

Quyet's sisters Trinh Thi Minh Hue and Trinh Thi Thuy Nga were convicted on the same charges as him and were given sentences of 14 years and eight years in prison, respectively.

The former chairman of the Ho Chi Minh Stock Exchange, Tran Dac Sinh, deputy CEO Le Hai Tra, and former deputy CEO Tram Tuan Vu were all convicted of abuse of authority in enabling Quyet to inflate his company's value, and sentenced to 6.5 years, five years, and 5.5 years in prison, respectively.

Quyet's arrest came as part of a crackdown on corruption instituted by Vietnamese authorities. The Communist Party’s Blazing Furnace campaign began in 2013, but it wasn’t until 2018 that authorities began scanning the private sector. Since then, several owners of Vietnam’s fast-growing businesses have been arrested.

The anti-corruption campaign had been the hallmark of Communist Party General Secretary Nguyen Phu Trong, Vietnam’s top politician. who died last month at age 80, three days before Quyet’s trial started.

The ideologue had called corruption a grave threat to the party and vowed that the campaign would be a “blazing furnace” where no one was untouchable.

In April, real estate tycoon Truong My Lan, was sentenced to death by a court in Ho Chi Minh City for orchestrating the country’s largest ever financial fraud case, was one of Vietnam’s most important businesspeople for years.

She has been convicted for fraud amounting to US$12.5 billion — nearly three per cent of the country’s 2022 GDP — and for illegally controlling a major bank and allowing loans that resulted in losses of US$27 billion, state media outlets reported.

Since 2016, thousands of party officials were disciplined, including former presidents Nguyen Xuan Phuc and Vo Van Thuong and the former head of parliament, Vuong Dinh Hue.

In all, eight members of the powerful Politburo were ousted on corruption allegations, compared to none between 1986 and 2016.

Rising reported from Bangkok