Preventing the phenomenon of blue and red armies in asset auctions

Continuing the 6th Session, on the morning of November 28, the National Assembly discussed in the hall the draft Law amending and supplementing a number of articles of the Law on Property Auction. Delegates highly appreciated the Government's consideration of amending and supplementing the Law on Property Auction to digitalize, prevent and combat corruption, negativity, waste, overcome institutional limitations and shortcomings, promote publicity and transparency of auction activities, and improve the effectiveness and efficiency of State management of property auctions.

One of the issues that many delegates are interested in and give opinions on is the deposit amount, rights and responsibilities of the person with the property to be auctioned, the auction participants, the auctioneer, the property auction organization...

The biggest flaw is determining the “real capital” of the auction participants.

Delegate Tran Van Khai ( Ha Nam delegation) affirmed that amending and supplementing the Law on Property Auction is extremely necessary and urgent, contributing to preventing harassment, abuse causing disorder and loss of budget in this field.

The delegate pointed out the phenomenon of "auction brokers", "blue team, red team" running rampant, colluding, distorting auction results, threatening auction participants to "depress prices"; bidding very high prices for some land lots, then "abandoning deposits", creating "virtual price" levels to manipulate the market... The delegate said that, to prevent this phenomenon, the draft Law stipulates strict handling of "information leakage" is necessary. However, according to delegate Tran Van Khai, it is necessary to study and supplement regulations prohibiting the organization of asset auctions and the Asset Auction Council so that people without sufficient financial capacity or "capital" can participate in asset auctions.

Regarding prohibited acts, the current Law on Property Auction does not regulate the issue of determining the financial resources of auction participants. According to delegates, this leads to the situation of taking advantage of auctions to disrupt the land market or "auctioning on behalf of others" due to insufficient financial resources, in many cases relying entirely on bank guarantees...

In the recent practice of land use rights auctions, delegate Tran Van Khai said that the biggest problem at present is also the biggest legal loophole in determining the "real" financial capacity of participants in land use rights auctions.

“This is not only a story of the Land Law but also a story of complicated speculation. They can take advantage of the auction stage, be interfered with by "black capital" sources, misappropriate or launder money... leading to the feasibility of the auctioned assets being delayed, prolonged, exploited and used according to the intentions of businesses or other forces", the delegate of Ha Nam warned.

From the above analysis, according to the delegate, on the one hand, it is necessary to study and perfect the regulations on 8 auction cases in Article 118 of the Land Law. On the other hand, it is necessary to study and supplement the regulations: strictly prohibiting auction participants from having insufficient financial resources or using non-transparent capital sources to participate in auctions or from associating with authorized auction participants, bidding for second or third parties in point 5, Article 9 of the Law on Property Auctions amended this time.

This will overcome the situation of corruption in land use rights auctions with non-transparent capital sources, where auction participants can pay "sky-high" prices and then abandon their deposits, distorting the land market or competing for the right to buy "intangible" assets of economic , commercial, security, and social value...

Regarding those who are not allowed to participate in property auction registration, delegates suggested that it is necessary to add regulations on insufficient financial capacity (to determine the financial background of auction participants in the records, clearly identifying the profession, job, capital source, history of auction participation, tax payment, administrative and economic violations, etc.).

"These additions are very necessary, especially for those who participate in auctions of very valuable assets, "intangible" assets such as land use rights, mineral exploitation rights or forest use rights. Land use rights in many cases are very large assets, have socio-economic development significance, long-term use related to economic security, national defense..., therefore, not everyone has enough financial capacity to participate in auctions," the delegate pointed out.

Do not allow corruption and negativity in the field of property auctions.

Sharing the same view, delegate Duong Khac Mai (Dak Nong delegation) said that currently, in auction activities, there are still shortcomings and negative aspects such as: The situation of “blue team, red team”: collusion between the person with the auctioned property and the auction organization. Regulations on the application of online auctions still have some limitations and shortcomings...

Therefore, the delegate suggested that the drafting agency continue to review and fully institutionalize the Party and State's guidelines, policies and strategies on promoting administrative reform, judicial reform, preventing and combating corruption and negativity in handling public assets, not leaving any loopholes or shortcomings for corrupt and negative subjects in the field of asset auctions.

At the same time, continue to research and strictly regulate the rights and responsibilities of property owners, property auction participants, auctioneers, and property auction organizations; specifically regulate the application of information technology and digital transformation in property auction activities, especially auctions of State-owned properties; for State-owned properties with a starting price of over VND 500 million, it is mandatory to conduct auctions online.

Regarding the property to be executed, the delegate said that this is a special property. On the other hand, the enforcement officer is only the person who has the right to auction the property according to the provisions of law (not the user or owner of the property). Therefore, the drafting agency needs to study and have separate regulations in accordance with the provisions on execution of judgment, as well as ensure the rights of the owner and user of the property.

"Blue army, red army" is increasingly sophisticated

Meanwhile, delegate Pham Duc An (Hanoi delegation) said that the report of the Government and the Ministry of Justice mentioned negative issues arising during the auction process, such as auctioneers violating the law and professional ethics being subject to administrative and criminal sanctions.

The Hanoi delegation commented that the situation of bid collusion, “blue team, red team”, brokers, and threats and coercion is quite sophisticated and tends to become more and more complicated. Therefore, when amending the law, there should be strict, public, and transparent regulations to prevent these acts.

Regarding the regulations related to deposits, the delegate said that it is necessary to look at it from two aspects thoroughly, including the need to amend Article 51 to avoid price manipulation, causing difficulties for both the valuation agency and auction participants. In addition, it is necessary to enhance the responsibility of the Ministry of Justice in Article 77 of the draft law in collecting and compiling information of organizations participating in the auction to detect irregularities, and coordinate with the Ministry of Public Security to investigate and handle./.

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