Transferring the investigation of bond violations of Novaland group of companies to the Ministry of Public Security

The Government Inspectorate has transferred the case of violations in the issuance of corporate bonds and the use of bond money by a group of companies under the Novaland Group to the Ministry of Public Security for consideration and handling.

The Government Inspectorate discovered many violations in the issuance of corporate bonds and the use of bond money by a group of companies under the Novaland Group.

The Government Inspectorate has transferred two cases of violations in corporate bond issuance at No Va Real Estate Investment Group Joint Stock Company (Novaland Group) and three member companies and four related companies to the Ministry of Public Security for consideration and handling.

The above content was stated by the inspection agency in the conclusion on compliance with legal policies on the issuance of individual corporate bonds and the use of funds from individual corporate bonds, from January 1, 2015 to June 30, 2023. This conclusion was publicly announced by the Government Inspectorate on October 17.

How does Novaland use 1,500 billion VND of bond issuance money?

The Government Inspectorate has inspected 67 bond-issuing organizations, including 5 joint-stock commercial banks, 37 joint-stock companies and 25 limited liability companies.

Including 18 bond issuing organizations belonging to Novaland Group, 6 organizations of Masan...

The conclusion shows that 67 organizations have issued a total of 827 corporate bond codes with a total value of more than VND 462,824 billion.

With 18 issuers belonging to Novaland Group and its subsidiaries, the inspectors determined that 131 corporate bond codes have been successfully issued. The codes have a term of 1-5 years, with a total value of 67,100 billion VND.

The inspection agency concluded that Novaland Group issued and used 1,500 billion VND from corporate bonds to increase capital for its subsidiary, Khai Hung Real Estate Company Limited. Khai Hung Company then used it to receive the transfer of 99.9% of the charter capital owned by Ms. Vo Thi Kim Khoa at The Century Hoang Kim Real Estate Company Limited (about 1,843 billion VND).

However, through checking and reviewing cash flow at a number of banks, the Government Inspectorate discovered that "Ms. Khoa's capital contribution at The Century Hoang Kim Company does not exist in reality because most of it was transferred on the same day," the conclusion stated.

Notably, after Novaland Group transferred 1,500 billion VND from corporate bond funds to Khai Hung Company, the company transferred this 1,500 billion VND and 400 billion VND from other sources to Ms. Khoa's account to pay for the share transfer.

Ms. Khoa then transferred 1,500 billion through many intermediary companies to Nova Housing Trading Joint Stock Company for use, the conclusion stated.

Violations and signs of violations in the use of corporate bond funds

According to the conclusion, there are 20 issuing organizations belonging to the group of companies related to Novaland Group, which have issued 45 individual corporate bond codes, with a total value of 27,350 billion VND. As of the time of inspection, there are 23 codes in circulation with a total value of 16,898 billion VND, of which 4 organizations have overdue debt of both principal and interest, 2 organizations owe interest. The total debt is 4,555 billion VND.

The inspectors also discovered four companies violating and showing signs of violating in the use of corporate bond funds.

The conclusion shows that Greenwich Company issued bonds and used 2,000 billion VND from corporate bond sources to cooperate with An Khang Company in the form of a guarantee to invest and operate the high-end commercial service urban area of ​​Cu Lao Phuoc Hung in Dong Nai province.

The inspection results showed that the signing of the contract in principle for the development of the real estate project by Greenwich Company and An Khang violated a number of legal regulations, and the urban area project was not eligible to mobilize capital.

Notably, after receiving corporate bond money, An Khang Company transferred it to many different organizations and individuals, "with signs of wrong purposes with large values, over a long period of time," the conclusion stated.

By the end of June 2023, the bonds had overdue principal of more than VND 1,571 billion and overdue interest of more than VND 241 billion, but Greenwich had not yet paid the bondholders. At the time of inspection, there was still a risk of not being able to pay the principal and interest of the bonds, posing a potential risk, causing damage to bondholders, including foreign investors.

At BNP Global Company, the conclusion stated that this organization issued bonds worth 2,100 billion VND and used them to pay part of the value of the business cooperation contract for the Mui Yen eco-tourism complex project in the former Binh Thuan province.

However, the inspection agency discovered that as of June 2023, the above project had not yet been granted a construction permit.

Notably, after receiving corporate bond money from BNP, Mui Yen Joint Stock Company transferred it to many other businesses, "with signs of improper use", including 1,000 billion VND lost due to debt collection by SCB Bank, the conclusion stated.

At the time of inspection, BNP Company still owed overdue bond principal of more than 2,000 billion VND and overdue interest of more than 64 billion VND. The Company negotiated with bond owners to extend the debt, but was not approved.

By 2024, the company had paid all overdue interest and part of the principal of VND833 billion. The remaining unpaid and overdue bond principal was VND1,216 billion, according to the inspection conclusion.

According to the Government Inspectorate, the company has violated its responsibility to fully and timely pay the principal and interest of bonds to investors. For now, BNP Global cannot fix the problem and arrange the source of money to pay the debt to bondholders.

Similarly, Residence Company issued VND3,000 billion in corporate bonds to pay the deposit for Nova Housing Trading Company to buy resort villas at the Nova World Phan Thiet project.

However, the inspector said that the above project did not have enough legal conditions to sell villas. On the other hand, after receiving the corporate bond money, Nova Housing Business Company "transferred money to many other businesses for unknown purposes".

Your Majesty

Source: https://tuoitre.vn/chuyen-bo-cong-an-dieu-tra-vi-pham-trai-phieu-cua-nhom-cong-ty-thuoc-novaland-20251017194823311.htm