Transferring the case of Novaland's violation of bond issuance to the Ministry of Public Security's investigation agency

On October 17th, the Government Inspectorate publicly released its conclusions regarding compliance with policies and laws on the issuance of private corporate bonds and the use of funds from these bonds, for the period from January 1st, 2015 to June 30th, 2023.

Between January 1, 2015, and June 30, 2023, 67 organizations issued a total of 827 corporate bond codes with a total issuance value of VND 462,824 billion.

Specifically, the group of companies including Nova Real Estate Investment Group JSC and its subsidiaries: 18 organizations issued a total of VND 67,105.54 billion in corporate bonds. Companies related to Nova Real Estate Investment Group JSC issued VND 25,650.5 billion.

Mr. Bui Thanh Nhon currently holds the position of Chairman of the Board of Directors at Novaland and directly oversees and directs the group's operations.

As of June 30, 2023, there were 52 issuers with outstanding bonds, totaling 387 bond codes and a total value of VND 195,349.293 billion.

According to the inspection findings, 5 out of 18 issuing organizations in the Nova Real Estate Group did not comply with regulations regarding the use of bond proceeds for purposes such as acquiring shares of charter capital from other organizations and individuals, and cooperating in investment and business in the real estate sector.

However, during the implementation process, there were signs of misuse of funds from corporate bond issuance, including the creation of transactions and the transfer of corporate bond proceeds through multiple intermediary organizations and individuals for use by another company (Nova Housing Business Joint Stock Company); the violations were complex in nature, and some issuing organizations had not yet repaid the principal and interest on corporate bonds at the time of inspection, posing risks to bondholders.

The total amount of corporate bonds issued by organizations through transaction creation and money transfer via organizations and individuals that were transferred to Nova House Business Joint Stock Company for use was approximately VND 7,084 billion during the period from issuance to the time of inspection.

"Due to the scope of the inspection, the nature and complexity of the violations and schemes in the transactions, which could cause consequences and risks for many bondholders and for society; Nova Housing Business Joint Stock Company was not subject to inspection, therefore the Government Inspectorate did not examine or verify the purpose and nature of the transactions. The Government Inspectorate transferred the information on the case to the relevant authorities for consideration and handling in accordance with the law regarding Nova Group and the four aforementioned member companies," the Government Inspectorate's conclusion stated.

Regarding information disclosure, the inspection results on the information disclosure responsibilities of issuing organizations showed that 17 out of 18 issuing organizations violated regulations on information disclosure, such as failing to disclose certain information and documents; disclosing information outside the prescribed timeframe; disclosing information with incorrect content; and disclosing incomplete information.

Regarding related issues, two issuers (No Va Group and Nova Final Solution Joint Stock Company) have overdue principal and interest on corporate bonds, and four issuers (No Va Thao Dien Co., Ltd., Nova Saigon Royal Real Estate Investment Co., Ltd., Gia Phu Real Estate Co., Ltd., and Thai Binh Real Estate Business Joint Stock Company) have overdue interest on corporate bonds, violating regulations on the issuer's responsibility to pay principal and interest on corporate bonds to investors;

Nova Group and its subsidiaries, including Gia Phu Company and Gia Duc Company, issued corporate bonds to cooperate in business and develop real estate projects. However, these projects do not yet meet the conditions for raising capital under housing law or have not been launched for sale according to the regulations of real estate business law.

Furthermore, documents and reports on collateral assets from several issuing organizations show that Gia Duc Company and BIDV Securities Joint Stock Company have not complied with regulations regarding some secured transactions involving land use rights and shares.

Yellow River

Source: https://doanhnghiepvn.vn/kinh-te/chuyen-vu-viec-novaland-vi-pham-ve-phat-hanh-trai-phieu-sang-co-quan-dieu-tra-bo-cong-an/20251018105527760

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