Why are companies named after FPT being established?

The Corporation for Financing and Promoting Technology (FPT) has recently established a series of companies named FPT, for example the FPT Fund Management JS Company (FPT Capital), FPT Securities JS Company (FPTS) and the FPT Commercial JS Bank, but currently, most FPT shareholders don’t know how much capital that the parent company contributed to these new firms.

According to anonymous sources, the parent FPT only contributed from 15 to 35% of chartered capital in those new companies. It means that from 65-85% of the chartered capital of companies named FPT came from a minority group of shareholders, some key officials of FPT.

When the parent FPT contributed such a small amount of money, can the subsidiary be named after the parent group?

Although contributing a small percentage of capital, which means that FPT group’s interests are also low, which is correlative to the contributed capital, the initial personnel of those subsidiaries are mainly officials from the parent FPT group. Thus, the parent FPT group helps build the framework for those firms that are named FPT.

The FPT brand is well known in Vietnam and in the world. This brand has been created by the whole staff of the parent FPT group and it belongs to the ownership of the whole shareholder body of FPT group. However, founding shareholders of new companies use the name of the parent FPT group to seek profit for themselves.

For example, the FPT Securities JS Company (FPTS) has the initial chartered capital of VND200 billion (US$12.5 million). The parent FPT group holds only 15% of this, or VND30 billion ($1.87 million). Though this company has not officially begun operating yet, its shares are offered for sale on the over-the-counter (OTC) market at a very high price – 8.5 times more than the basic price.

None of the many securities trading companies which were established at the same time as FPTS have such a high price for their stocks like that of FPTS. Could it be that the super price for FPTS stocks is thanks to the FPT brand?

With a market price that is 8.5 times more than the face price, the capital value of FPTS will reach VND1,700 billion ($106.25 million). Of the surplus of VND1,500 billion ($93.85 million) (subtracting the chartered capital already), the parent FPT group enjoys only 15% and the remaining 85% belongs to other shareholders in FPTS.

If it is true, the parent FPT group is only a shadow for the profit of a group of shareholders.

Of the chartered capital contributed by the parent FPT group to the new companies, small shareholders benefit little. The parent FPT group is owned by all shareholders so when this brand is taken advantage of, small shareholders will be the first to incur losses.

Many shareholders question: why doesn’t FPT group establish limited liability companies? If it establishes joint stock firms, why doesn’t it hold the majority of shares?

Reacting against this, many shareholders of FPT have sold shares in recent days, making the prices for FPT stocks fall down, causing a domino effect that has pulled the stock market down as well.

Source: VNE