The 3.6 trillion VND fraud scheme by Trinh Van Quyet and the complicity of an auditing firm.

In the case involving FLC Group Joint Stock Company (FLC Group) and related entities, former FLC Chairman Trinh Van Quyet has been recommended for prosecution on two charges: fraud and manipulation of the stock market.

According to the supplementary conclusions of the Ministry of Public Security's Investigation Agency, in the fraudulent activities alone, Mr. Quyet and his accomplices embezzled more than 3,600 billion VND from investors through the scheme of artificially inflating the charter capital of Faros Construction Joint Stock Company (from 1.5 billion VND to 4,300 billion VND), registering and listing shares, and then selling them.

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Phi vụ lừa đảo 3.600 tỉ của Trịnh Văn Quyết và sự tiếp tay từ công ty kiểm toán- Ảnh 1. — The defendant is Trinh Van Quyet, former Chairman of FLC Group.

Significantly, for the actions of defendant Trinh Van Quyet and his subordinates to go undetected, the prosecuting authorities determined that a number of leaders and officials at the Ho Chi Minh City Stock Exchange (HoSE) and the State Securities Commission played a major role. Furthermore, the complicity of securities companies cannot be overlooked.

The investigation concluded that, in order to register the listing of ROS shares of Faros Company, one of the important documents was the financial report for 2014, 2015, and the first three months of 2016 of this company.

The two entities selected to conduct the audit were Hanoi Auditing and Accounting Company Limited (hereinafter referred to as Hanoi Auditing Company) and ASC Auditing Company Limited (now TTP Auditing Company Limited).

After defrauding billions of dong, what did former FLC Chairman Trinh Van Quyet do with the money?

Issuing audit reports in violation of regulations to receive money.

According to the Investigation Police Department of the Ministry of Public Security , when carrying out the audit contract, Mr. Nguyen Ngoc Tinh, General Director of Hanoi Auditing Company, was well aware that Faros Company's financial statements did not meet the criteria for full acceptance. Despite this, the company still issued independent audit reports, all containing full acceptance of Faros Company's financial statements and owner's equity reports.

When Faros Company submitted its application for public company recognition to the Public Supervision Department of the State Securities Commission, the authorities discovered that the audit report did not comply with regulations and requested a new audit and reissue of the audit report.

However, the Hanoi Auditing Company did not conduct a re-audit. Instead, Mr. Tinh, along with the company's auditor, Le Van Tuan, continued to issue three independent audit reports, fully accepting the financial statements and owner's equity reports of Faros Company, only adding a section "note to readers of financial statements".

The prosecuting authorities determined that the actions of defendants Tinh and Tuan were contrary to regulations and violated Vietnamese auditing standards. The issuance of incorrect audit reports created conditions that allowed defendant Trinh Van Quyet and his accomplices to use them in their applications and subsequently list ROS shares.

During the investigation, Mr. Tinh admitted to the act and stated that FLC Group and the companies within its ecosystem were large and frequent clients of Hanoi Auditing Company. Therefore, the defendant issued the audit report in violation of regulations at the request of the company in order to receive payment.

Phi vụ lừa đảo 3.600 tỉ của Trịnh Văn Quyết và sự tiếp tay từ công ty kiểm toán- Ảnh 2. — The police conducted a search at the FLC headquarters at the time the case was initiated.

Signing the confirmation without checking or verifying.

Regarding ASC Auditing Company Limited, the Police Investigation Agency of the Ministry of Public Security stated that the company's Deputy General Director, Ms. Tran Thi Hanh, was directly responsible for collecting records and documents to evaluate and inspect the business operations based on the financial reports of Faros Company.

Similar to the defendants from Hanoi Auditing Company, even though the audit documents collected were insufficient, Ms. Hanh still signed and issued audit reports with unqualified audit opinions along with the company's auditors.

Furthermore, Ms. Hanh is also accused of failing to check and verify the investment trusts of Faros Company, but still signing off on the company's document regarding the supplementary explanation of the investment trusts submitted to HoSE.

The female defendant's actions helped defendant Trinh Van Quyet and his accomplices create explanatory documents as required by HoSE so that Faros Company could list its shares on the stock exchange, thereby committing fraud and misappropriating money from investors.

During the investigation, Ms. Hanh confessed to her wrongdoing but denied any intention of defrauding or misappropriating assets. Besides the audit fees stipulated in the contract, the defendant did not receive any other benefits.

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