The Vietnamese government said on Wednesday it has annulled the sale of shares in state-run retailer and exporter Intimex and is investigating whether securities laws were violated.
It is the first reported crackdown on share sales as the communist country speeds up its privatisation plan, which has fuelled one of the world's fastest growing stock markets.
Deputy Prime Minister Nguyen Sinh Hung ordered the Trade Ministry to void the auction of its subsidiary Intimex, which operates supermarket and exports coffee and pepper, a statement on the government's Web site (http://www.chinhphu.vn/) said.
The statement quoted Hung as saying reports from Trade and Finance ministry officials and the police showed Intimex Import Export Corp had violated the Securities Law by publishing distorted financial information and conducting insider trading.
Company officials could not be reached for comment.
On April 12, Intimex sold all 1,682,800 shares on offer, or 33.66 percent of the company, to several domestic investors in an initial public offering, raising 269.3 billion dong ($16.7 million).
The shares were sold at an average price of 160,025 dong ($9.9), way above the 10,200-dong opening price for bids, valuing the company at $49.65 million -- nearly twice the book value of $27.2 million Intimex had assessed.
The large gap -- together with the small number of winning bidders -- raised suspicion among other investors who said the company had undervalued its assets and withheld information, which was then used by a small group of bidders.
Intimex runs a number of supermarkets in Hanoi and the north but is known abroad as an exporter of robusta coffee and pepper. Vietnam is the world's top exporter of the two commodities.
Vietnam has been speeding up privatisations to boost the stock markets and raise funds to fuel the economic growth targeted at 8.5 percent this year.
Source: Reuters
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