Bond buyers via SCB, Tan Viet: “This Tet will be terrible for everyone!”

Bondholders in Hanoi bought bonds through SCB, Tan Viet protested in front of the headquarters of the State Securities Commission

Mr. Dung (names of the characters in the article have been changed for security reasons), an investor who has bought bonds through SCB up to several billion dong exclaimed that the coming Lunar New Year will be a “bitter” Tet/festival for many customers of SCB when their money saved to invest and buy bonds is at risk of being lost.

He said that he has been a loyal customer of SCB for over 10 years, but was recently advised by the staff of this bank to buy Van Truong Phat corporate bonds in the number of billions of dong.

But since the Ministry of Public Security announced the arrest of leaders of Van Thinh Phat Group and related companies on October 8 for being found to be fraudulent in the issuance and trading of illegal bonds to appropriate thousands of billions of dong from the people, he himself felt like sitting on the fire because he knew the whole inheritance left by his parents could go away.

On November 3, social networks in Vietnam exploded with photos and videos recording thousands of customers of Saigon Commercial Joint Stock Bank (SCB) visiting branches throughout the country’s north, central and south regions to claim back the money they bought corporate bonds through the referral of SCB.

Some security guards loudly pushed and pushed customers, while one SCB representative could not answer all customers’ questions about the proposal to hold a dialogue with stakeholders.

My parents lost their source of income from here

Not as lucky as Mr. Dung, who is an idle investment, Ms. Ha, an investor also in Ho Chi Minh City, said that she spent more than a billion dong to buy bonds of Tan Thanh Long An company directly from Tan Viet Securities Joint Stock Company, with the promise to buy back the bonds after six months.

She is paid monthly interest, with an interest rate of 8%/year, and plans to get her capital back on October 26 to pay for the land she intends to buy, but when she contacted, Tan Viet Securities JSC said it has “lost liquidity.”

This money is the family’s savings, and with the thought that it is more profitable than savings and can withdraw capital flexibly, she decided to invest it to earn interest for her elderly parents to live.

Recently, when the incident broke down, Ms. Ha just read the Information Disclosure of Tan Thanh Long An Company – a private bond issuer.

According to her, this company requires investors to have a certificate of being a professional investor to be sold, but for unknown reasons, when she was consulted and signed a contract, she was not fully informed by the staff about this rule and the risks of buying corporate bonds.

Tan Viet Company on October 21 confirmed that the bond lots of Tan Thanh Long An or Van Truong Phat are not related to Van Thinh Phat Group that investors bought through SCB, Tan Viet company will buy Tan Thanh Long An bonds and pay both bond principal and interest.

Ms. Dung, a trader in Hai Duong, bought bonds of An Dong Company (a member company of Van Thinh Phat) through SCB two months ago in the amount of VND600 million ($24,000).

This is the amount of money she was sent by her brother to keep, she hid it from her brother in a savings account in the hope of earning interest and thought that she could withdraw it at any time, as the banker said.

However, like Mr. Dung and Ms. Ha, Ms. Dung was not consulted about the possible risks.

Now, “I also hide my brother only to let my husband know, because when my brother knows, maybe my family will not be able to see each other.”

The cases that reporters had the opportunity to talk about were a few of the 40,000 customers who bought An Dong bonds through SCB with a value of up to VND25 trillion, but now they are not allowed to get back their money, even with no interest rates.

On November 3, the domestic press quoted information from the Hanoi Department of Planning and Investment that announced the suspension of asset fluctuations for 762 companies related to Van Thinh Phat Group and giant businesswoman Truong My Lan.

This blockade is at the request of the Investigative Police Agency of the Ministry of Public Security to serve the request of investigating the case that happened at Van Thinh Phat Group Joint Stock Company and related units, organizations, and individuals, but the full list is not published in the newspaper.

The victims passed an unofficial list saying that the companies Van Truong Phat, Tan Thanh Long An, … all had their names blocked by the Ministry of Public Security.

The accuracy of this list is not clear, but some people who bought bonds from the companies mentioned above told us that SCB or Tan Viet refused to buy back the bonds nor pay interest when due under the contract.

What does SCB say?

On November 3, SCB published an open letter admitting that “it has cooperated with a number of securities companies to provide the service of introducing customers who wish to buy/sell corporate bonds for securities companies.”

However, this bank asserts that it “only introduces customers to securities companies and does not enter into any contracts or agreements with customers related to the purchase/sale of corporate bonds.”

The word “NO” is bolded and fully capitalized by SCB on the company’s open letter.

Mr. Lam Minh Chanh, President of BizUni Academy of Business & Finance, on his Facebook page with more than 150,000 followers, has an article titled “SCB cannot be innocent of customers who were advised by the bank’s staff, and paid to buy corporate bonds at the counter of SCB!”

According to Mr. Chanh, bond buyers pay money to buy bonds right at the bank counter, and the bank receives money to buy bonds from people right at their counter. He said the bank’s act was the distribution and sale of bonds.

According to experts in the financial sector, banks are an important financial institutions, strictly managed by the State, and trusted by the people. Therefore, banks must be careful in distributing and introducing financial products to people who transact at the bank.

Banks cannot distribute or introduce junk bonds, or fraudulent bonds to people, and then say that the bank is just an introducer, with absolutely no responsibility,” said Mr. Chanh.

According to the former General Director of Dai Viet Securities Company, the fact that some bank staff actively offer bonds to customers to deposit money is an act of forcing the sale of other products that customers do not ask, for and the act of not advising the truth about the product is “a big mistake for a financial professional.”

On November 6, SCB continued to make another announcement, saying “it is continuing to work with Tan Viet Securities JSC, the Issuing Organization, the Ministry of Public Security, and competent state agencies to present the legitimate wishes and recommendations of customers, in order to solve problems on the basis of respect for the law and protect the legitimate rights and interests of customers.”

SCB asks customers to calm down, understand and comply with the provisions of the law, and at the same time not interfere with the normal business activities of SCB.

Even if I get my money back, I will never invest in the Vietnamese market

Mai, a knowledgeable person in the financial sector, told a reporter from Radio Asia that “If the government does not fully solve this case, people will no longer trust the Vietnamese bond market.”

According to her, this is a profound lesson about domestic bonds/stocks in general, and assuming “If I can get my money back, I won’t invest in this market anymore either but only keep cash in hand.”

She is the person who twice bought bonds with a total of VND400 million through the advice of SCB bank staff, when Mr. Do Anh Dung – Chairman of Tan Hoang Minh Group was arrested in April, she hesitated to sell the bonds and get back VND200 million. However, half of her investment in An Dong’s bond is still stuck because the Ministry of Public Security has frozen the company’s assets.

Because her studies and work are related to the financial sector, Ms. Mai is more or less aware of the risks when investing in corporate bonds, but when she came to trade at SCB in 2020, she was advised: “Invest in bonds, interest rates are higher, savings interest rates are only from 6-7%, flexible bond interest rates are 8.6%, fixed interest rates are 8.9%, flexible bonds after 30 days are withdrawable, fixed, after one year, it will be withdrawn.”

Mai decided to invest the savings of her couple but did not know that this was An Dong’s “4 no” bond (no collateral, no payment guarantee, no credit rating, no listing).

She sighed that, if she was advised like that, “I and many others would not send it, but over here SCB talks like it’s a saving.”

Ms. Ha, who invested more than VND1 billion in bonds of Tan Thanh Long An company through Tan Viet Securities JSC more aggressively, said that she intends to take Tan Viet to court to get her property back or file a denunciation to the Ministry of Public Security for saying that “these two companies colluded to deceive people.”

Tan Viet Company and SCB did not immediately respond to the reporter’s email requesting comment on the people’s allegations.

On October 21, Industry and Trade newspaper reported an exchange of Tan Viet Securities with investors about bond lots and its plans to buy, sell and transfer corporate bonds that this unit advises on issuing.

Accordingly, Saigon Commercial Joint Stock Bank (SCB) and Van Thinh Phat Group are not shareholders of Tan Viet (TVSI) and have absolutely no impact on the management of TVSI.

Tan Viet Securities said that the bonds related to Van Thinh Phat Group, especially An Dong bonds, are in the process of investigation and conclusions of the authorities, the payment progress for these bonds is subject to the investigation progress of the authorities.

Tan Viet also affirmed that bond lots not related to Van Thinh Phat Group are still committed by the issuers to pay interest and principal in accordance with regulations.

On November 7, the state media cited a meeting from three days ago of the People’s Committee of Ho Chi Minh City related to Saigon Commercial Joint Stock Bank (SCB).

According to the meeting conclusion notice from the Office of the People’s Committee, after listening to the comments, the leaders of the City People’s Committee suggested that SCB need to provide information, explain clearly, considerately, politely, find out aspiration for each case to support, dialogue, do not shy away. (Translated)

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