After the uproar concerning the cancellation of Tan Hoang Minh Group’s nine bond issuances and the arrests of several members of their management, I wanted to look a bit more into the matter. As a result, I asked one of our legal assistants to prepare an article about what’s going on. The article below, written by Ms. Le Thi Minh Trang, is a good overview of the accusations and the legalities of the alleged fraud that is said to have occurred in relation to the issuances. I will refrain from comment, as this is solely the intellectual property of Ms. Le, and with much appreciation, therefore, I commend the below to your consideration.

The Case of Tan Hoang Minh

by Le Thi Minh Trang, Legal Assistant, Indochine Counsel

On the evening of April 5, 2022, under the approval of the Supreme People’s Procuracy, the Investigative Police Agency (Crime Investigation Department of Corruption, Economy and Smuggling – C03) of the Ministry of Public Security issued a decision to prosecute the case and warrant to detain Do Anh Dung, the Chairman and General Director of  Tan Hoang Minh Group on charges of “fraudulent appropriation of property” in line with Article 174 of the 2015 Penal Code, amended and supplemented in 2017.

For the same crime, six other people that were arrested in connection with the case include: Do Hoang Viet, Deputy General Director of Tan Hoang Minh Group (second son of Do Anh Dung); Nguyen Manh Hung, former Chairman of Viet Star Real Estate Investment Co. Ltd.; Tran Hong Son, Chairman of Soleil Hotel Service and Investment JSC; Nguyen Khoa Duc, Chairman and General Director of Winter Palace JSC; Le Van Thinh, Deputy General Director of Tan Hoang Minh Group; and Phung The Tinh, former Director of Finance and Accounting of Tan Hoang Minh Group.

The initial investigation results showed that from July 2021 to March 2022, Do Anh Dung and other individuals at Tan Hoang Minh Group committed fraud by using three subsidiary companies, namely Viet Star Real Estate Investment Co. Ltd., Soleil Hotel Investment and Hotel Services JSC and Winter Palace JSC, and other related companies, to illegally issue nine bond sessions with a total value of VND10.3 trillion (USD450 million) in an attempt to mobilize money from investors but not for business activities according to the bond issuance documents.

According to data published on the corporate bond information page of the Hanoi Stock Exchange (HNX), out of a total of 9 sessions of corporate bonds offered for private sale, 8 sessions from July 2021 to December 2021 were accompanied with an announcement of issuance information. One bond session remains unpublished on this portal.

Basic information about Tan Hoang Minh’s 9 bond issuances is as follows:


Issuing company Time Value

(million VND)

Viet Star Real Estate Investment Co. Ltd. 5/7/2021 800 Buying 306 million shares from Viet Tien (subsidiary of Tan Hoang Minh)
20/9/2021 1900 Investing in Southern of Dai Co Viet project
Soleil Hotel Investment and Hotel Services JSC 6/7/2021 800 Investing in Hoang Hai Phu Quoc
20/8/2021 450
01/11/2021 500
Winter Palace JSC 22/11/2021 254 Investing in Hoang Hai Phu Quoc
22/11/2021 196
16/12/2021 3230 Unavailable (not submitted to HNX)
Unavailable Unavailable 1900 Unavailable


All of the bond buyers, i.e., bondholders, are organizations; there are no individual investors. The primary investors were, in fact, Tan Hoang Minh Group and its member companies. These organizations then proceeded to sell the bonds to retail investors as an “investment partnership”. This is considered a sophisticated “law-evasion” tactic to reach more customers than are allowed in a private placement and create a situation akin to a public offering without the extra disclosure and procedure. According to law, private bond placements may only be made to professional investors, defined as those with total securities holdings of over USD2 billion or with a taxable income of VND1 billion. According to the commitments of the issuing businesses in this instance, individual investors, as non-bond owners, will not be guaranteed the rights to these bonds.

Earlier, on April 3, 2022, the State Securities Commission (SSC) issued Decision 181/QD-UBCK on the cancellation of the nine bond issuances on the grounds that Tan Hoang Minh Group had committed “acts of disclosing false information, concealing information in private bond issuances”. The SSC has requested bond registration and depository organizations to stop transferring ownership of the related bonds. The unprecedented cancellation of successful bond issuances has captured the public attention and raised a ruckus in the domestic economy.

Pursuant to Clause 6, Article 8 and Point a, Clause 3, Article 4 (amended by Point c, Clause 3, Article 1 of Decree 128/2021/ND-CP) of Decree 156/2020/ND-CP on prescribing penalties for administrative violations against regulations on securities and securities markets, Tan Hoang Minh may be administratively fined from VND400 million to VND500 million. In addition, depending on the nature and severity of the violation, the enterprise may be subject to one or several remedial measures, which include, as in this case, the enforced withdrawal of issued or offered securities; return of payments or deposit for securities (if any) plus interest calculated according to the interest rate specified on the bonds.

In the event it is deemed that the acts constitute the crime of “deliberate publishing of false information or concealment of information in securities activities” as stipulated in Article 209 of the 2015 Penal Code, the violators will be examined for penal liability, with the maximum penalty for this crime being 5 years imprisonment. Commercial legal entities can thus be fined up to 5 billion VND.

In addition, the leader of the SSC also stated that the three above member companies of Tan Hoang Minh Group, which are unlisted companies, do not report to the Securities Commission on issuances but only register information through the corporate bond portal of the Hanoi Stock Exchange (HNX). Under the current regulations, the private placement of corporate bonds must fully comply with the provisions of Decree No. 153/2020/ND-CP dated 31 December 2020 prescribing private placement and trading of privately placed corporate bonds in the domestic market and offering of corporate bonds in the international market (Decree 153). However, the provisions of Article 11 of Decree 153 show that the process of private placement of bonds by non-public companies does not require the above-mentioned reporting procedure to the SSC.

For the crime of “fraudulent appropriation of property” that is being investigated against Do Anh Dung and 6 others, based on Clause 4, Article 174 of the Penal Code, offenders may face a prison term of 12 to 20 years, or life imprisonment as the highest penalty. Nevertheless, there must exist two essential elements before the crime can be established, namely: “deceitful behavior” and “appropriation of property”. Accordingly, the element of “appropriating property” needs to be proven and clarified by identifying whether the suspects had the intention of appropriating and failing to fulfill the obligation to return money to investors.

Upon his arrest, Do Anh Dung authorized Do Hoang Minh (his first son), Deputy General Director of Tan Hoang Minh to run the group. Tan Hoang Minh subsequently confirmed their stance that all bond information given to customers was in accordance with what bond issuers, valuation companies and banks provided. In its announcement, Tan Hoang Minh also said that it will put in place various measures to calm the market and plans to stabilize its business operations, especially giving priority to issues of bond investment with the aim of complying with the commitment and goal of returning all investment amounts to customers.

Currently, the case is still under investigation and there is no final conclusion. The authorities are still looking into a series of violations involving Tan Hoang Minh Group and its subsidiaries in bond distribution and capital raising.