Vietnamese tycoon accused of stock fraud

Nov 29, 2010, 6:02 GMT

Hanoi - One of the wealthiest players on Vietnam's stock exchange has been arrested in what authorities said Monday was the bourse's first case of securities fraud.

Le Van Dung, recently dismissed as chairman and chief executive officer of Duoc Vien Dong (DVD) Pharmaceutical, was accused of manipulating the stock price of another pharmaceutical company.

'This is the first arrest relating to securities fraud in Vietnam's stock market since it was opened,' said Nguyen Quang Viet, the chief of the State Securities Commission of Vietnam. The Hanoi Stock Exchange opened in 2000.

The state run newspaper Viet Nam News said Dung allegedly manipulated the price of Duoc Ha Tay Company, listed as DHT.

Authorities placed Dung and younger brother Le Van Manh, who was also arrested, at the centre of a scheme known as pumping-and-dumping. The brothers and collaborators created a false demand in DHT and lured investors into buying the stock at inflated prices, before selling their own shares, authorities said.

The group had successfully pushed the DHT share price from 30,000 dong (1.53 dollars) in March to 100,000 dong in July, they said.

The DHT price has been falling since Dung's group is suspected of unloading their shares in late July. On Monday, Hanoi Stock Exchange closed up 3.6 per cent, but DHT shares closed down 7 per cent at 45,400 dong.

Dung's group held 28.68 per cent of DHT when they started selling shares in July.

Dung also holds around more than one-third of DVD shares, with a value of 240 billion dong. He is listed as one of the 60 richest people in Vietnam's stock market.

On Thursday, the DVD executive board dismissed Dung from his management positions.

Ho Chi Minh City's Stock Exchange said Friday that DVD shares would be put on alert as a way to protect investors, saying Dung's arrest might strongly affect the company's operation.

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