Vietnamese police arrested a second executive of Vien Dong Pharma Joint-Stock Co. in a week as authorities clamped down on securities fraud.
Vien Dong’s deputy general director and chief accountant Cao Hong Van was arrested after she allegedly paid bribes, the State Securities Commission said in a statement on its website today. Criminal proceedings against Le Van Dung, former chairman and general director of Vien Dong, started on Nov. 24 and he was arrested two days later for alleged stock price manipulation, the company said in a statement on Nov. 29. The regulator said today it “will continue working with investigators to clarify wrongdoings of Vien Dong Pharma and related individuals.” In a separate statement, the commission said Dung manipulated the share price of another drugmaker, citing initial police findings.
The Ho Chi Minh City Stock Exchange’s VN Index ended its best week in three months today, paring the world’s worst performance in the second half of 2010. The gauge has tumbled 60 percent from its 2007 peak because of securities fraud allegations, tighter lending to combat inflation and currency devaluations to curb a widening trade deficit.
Dung and other unidentified people opened accounts to artificially create demand and supply for shares of Hatay Pharmaceutical Joint-Stock Co. Hatay shares have slumped 58 percent since rising to a record 98,500 dong on Aug. 18. The shares remain 46 percent higher this year.
The commission has frozen securities trading accounts held by the former chairman, Dung, two companies and 13 other people as part of the investigation, it said in statement yesterday.
The regulator has seen signs that Dung and accomplices may have also manipulated the stock price of his own company, Vien Dong Pharma. The commission may cancel a planned share sale by the drugmaker.
Dung and unidentified people set up numerous companies under names of family and friends to create artificial revenue for Vien Dong, the regulator said today. He provided false information about high-value contracts in order to sell shares to the public and help with the listing of the shares on the stock exchange.
Vien Dong got approval to sell 7.09 million shares to existing shareholders and employees on Aug. 25, it said in an Aug. 26 statement on the exchange’s website. The commission suspended the share sale on Nov. 19, according to a statement on its website on that day.
To contact the editor responsible for this story: K. Oanh Ha in Hanoi at email@example.com