Commission draws flack for being soft on market violators

There is growing public concern that punishments for violating securities laws are too lax, which only encourages more people to break the rules.

Though the State Securities Commission (SSC) has indicated all violators would face harsh repercussions, the number and types of regulatory infringements continues to rise.

Since the beginning of the year, the HCM City Securities Trading Centre (HoSTC) has issued warnings to securities companies and suspended brokers for mismanaging orders. The companies include Hai Phong Securities, Au Lac Securities, Gia Anh Securities, Thang Long Securities and HCM City Securities.

The SSC recently ordered six brokerages, including Pacific Securities and VPBank Securities, to close employees’ secondary accounts. Regulations state that brokers are allowed to open only one account with their company of employment.

It is not only small securities firms that have violated regulations.

Indochina Capital was fined VND10 million for trading VNM shares internally without reporting the activity to authorities, while HoSTC officials have warned Citigroup Global for not reporting its acquisition of 5.48 per cent of NKD shares.

Sai Gon Securities Inc had to pay a VND10 million fine after raising its charter capital three times last year from VND52 billion to VND500 billion without reporting to the commission in time.

There were also cases with senior executives at listed companies silently trading shares without properly notifying authorities.

In mid-June, Tran Le Viet Hung, a board member of Bibica JSC (BBC), and Luu Tan Khoa, supervisor of Ry Ninh II Hydropower JSC (RHC), traded BBC and RHC shares on the HCM City exchange, but did not tell authorities and executives at their respective companies.

The HoSTC did not punish either of the executives, but issued a warning to properly comply with regulations regarding public disclosure in future.

Bui Ngoc Tuoc, a freelance securities analyst, says most securities violations are intentional and were discovered only after the SSC and HoSTC carried out investigations.

The two executives who financially gained from silently swapping shares, for example, knew the regulations clearly but were not afraid since they knew punishment would be light, says Tuoc.

On June 28, the SSC announced it had imposed a VND30 million fine on Nguyen Diem Phuong Khanh, an investor in HCM City, after she colluded with her brokerage to create artificial demand for a stock, which pushed share prices higher.

"This was good news as it was the first time an attempt to distort prices was discovered," says HoSTC Deputy Director Le Hai Tra. "The punishment was rather light though, but we cannot act beyond the scope of regulations."

Some brokerages are upset with how authorities have handled cases since soft punishments only hurt securities companies that comply with regulations.

SSC Director Vu Bang says the commission has submitted a plan to the Government to establish a regulatory enforcement board, which will co-operate with securities trading centres on market oversight.

The board’s two main functions will be to search for market manipulating practices and oversee the bourses’ information systems.

Source: VNS

Bourbon Tay Ninh Sugar Company to sell 49% of shares

The Bourbon Tay Ninh Sugar Joint Stock Company (SBT) will auction 49% of its shares next month.

3% of the total 70 million SBT shares will be sold exclusively to local cane farmers and 2%, to SBT staff, said SBT General Director Philippe Lombard.

Under the company's equitisation plan, SBT will retain 51% of the stake or 72.8 million of the total 141.9 million shares worth 1.4 trillion VND (approximately 104 million USD).

The company has so far signed contracts to transfer 24% of its chartered capital to 17 partners, including Vinamilk, Kinh Do, Bibica and VinaCapital.

SBT was set up in 1995 as a joint venture between the Bourbon Group of France and two Vietnamese partners, with the French group representing a 70% stake of the 28.5 million USD in chartered capital and its 95 million USD investment capital.

In 1998, the company increased its chartered capital to 39.5 million USD and its investment capital to 111 million USD.

After Bourbon acquired the two partners’ stake in 2000, capital then grew to 112 million USD and 113 million USD, respectively.

In March 2007, SBT received a licence from Tay Ninh provincial authorities to become a joint-stock company.

The company specialises in making refined sugar, producing power from sugarcane waste to serve its production lines and providing sugarcane cuttings.

It hauled in over 193 billion VND (11.8 million USD) from the 2006-07 sugarcane crop.

Source: VNA

Bibica builds factory

The Bien Hoa Confectionery Joint Stock Company (Bibica) began work Monday on its third factory with the first phase to cost 78.9 billion VND (4.9mio US$). Using Italian technology, the plant, in My Phuoc Industrial Park 1 in the southern province of Binh Duong, will produce yearly 2,500 tons of cream and chocolate cakes. It will start operation in August this year.
The second phase will be completed next year at 100 billion VND (6.2mio US$) to manufacture health products.

Bibica was one of the first 10 companies to list on the Ho Chi Minh City Securities Trading Center. Its pre-tax profit last year was 15 billion VND (933,000 US$) on a turnover of 341.3 billion VND (21mio US$). Its previous factories are in Dong Nai near HCMC and Hanoi.

Source: Thanh Nien