Chairman of the FLC Group Trinh Van Quyet was fined VND1.5 billion (US$66,000), the heaviest penalty possible, along with a five-month ban from the stock market as of January 18.
|FLC Chairman Trinh Van Quyet.|
The State Securities Commission of Vietnam (SSC), the country’s stock market watchdog, revealed the decision today [January 18] about Quyet’s sale of 74.8 million FLC shares on January 10 but failed to notify the market authorities in advance as stipulated in the law.
The Government’s decree No.128 stipulating administrative penalties in the stock market requires major shareholders to notify the authorities in advance of any intended transactions. Those violating the law, therefore, are subject to a penalty ranging from VND5 million ($220) to 5% of the actual transaction value that is over VND10 billion ($440,000).
One day later, the SSC on January 11 annulled Quyet’s transactions, noting this was an unprecedented move but a necessary one for the transparency and healthy development of Vietnam’s stock market.
At the close on January 10, FLC’s stocks ended at the floor price of VND21,150 ($0.93) with nearly 135 million shares changed hands, the biggest volume since the company’s debut on the HoSE in 2013.
During the trading session, the company’s stock went up to VND24,100 ($1.04) apiece, meaning Quyet’s sale of 74.8 million shares would have raised VND1.8 trillion ($79.28 million) at that price.
Quyet’s sudden sale of FLC shares without any notice in advance during the session caught many investors by surprise.
The incident started a wave of investors selling out FLC shares and others related to the Group founder, such as ROS, AMD, KLF, or HAI, which have witnessed declines in seven consecutive trading sessions.
FLC’s share value has more than doubled since September, equivalent to an increase of 363% since January of last year.
With this latest decision, investors who have purchased Quyet’s FLC shares on January 10 would not receive any shares or have their money deducted, and Quyet would receive back all of his shares.