Vietnam FLC Group's Fund-Raising Scheme: Inflating Registered Capital for Listing and Cross-Trading Manipulation Across Five Stocks

Who Gets Targeted

The victims are primarily the approximately 25,000 to 30,000 retail investors who purchased ROS stock of FLC Faros—ranging from retired seniors to small and medium business owners. Attracted by the aura of a listed company, real estate giant, and aviation license, as well as recurring rumors of stock splits and dividends, they followed the trend to subscribe through brokerage branches and online stock forums. Another group of victims consists of over a thousand homebuyers in real estate projects such as FLC Tropical City Ha Long, who have long been unable to obtain their property ownership certificates because the developer's funds were diverted for affiliated acquisitions. Their shared psychological weakness is an over-reliance on the persona of major tycoons and thematic narratives, a lack of ability to verify prospectuses, actual capital contributions, and project cash flows, mistaking approval for listing as official endorsement, and underestimating how misleading the false transaction volume generated by multi-account cross-trading is to their decision-making.

骗局怎么运作

• Step 1: Inflating registered capital to build a shell. Between 2014 and 2016, FLC Faros had an actual capital contribution of only about 1.2 billion Vietnamese Dong, but inflated its registered capital to 430,000 billion Vietnamese Dong through forged capital verification documents, and subsequently submitted false materials to the exchange. The mechanism of this step was to replace paid-in capital with book capital, bypassing the exchange and regulatory substantive review of the issuer, and packaging a construction company with almost no actual foundation into a public company eligible for public offering.
• Step 2: Raising funds publicly through listing scams. After ROS stock was listed on HOSE, it was sold to approximately 25,000 to 30,000 investors—totaling around 391 million shares—using participation in FLC Group's large-scale real estate projects and backing by a real estate empire as selling points. The determined amount acquired through fraud was approximately 362.1 billion Vietnamese Dong. The pitch focused on national infrastructure and aviation themes; investors mistakenly believed they were subscribing to audited quality assets, but what they actually bought was artificially inflated paper equity, with no corresponding net asset value to back up the stock price.
• Step 3: Driving up stock prices through multi-account cross-trading. Between 2017 and 2022, the mastermind instructed relatives, employees, and about 20 shell companies to open approximately 190 to 500 securities accounts, conducting continuous large-scale buying and selling, high-priced order placement followed by cancellations, and concentrated surges during market opening and closing sessions across five stocks: FLC, ROS, ART, HAI, and AMD. This fabricated false supply and demand alongside active trading. Retail investors chased the rising prices after seeing volume-price breakout K-line charts, while the market manipulators unloaded in batches during the rally, resulting in an identified illegal profit of approximately 72.3 billion Vietnamese Dong.
• Step 4: Generating hype through aviation and real estate concept rotation. The raised funds were used to acquire shares in Bamboo Airways, build resorts and golf courses, and the group continuously released positive news such as entering aviation and securing land to sustain the multi-billion empire narrative. This cycle of channeling financing funds into affiliated assets and then using asset stories to drive up valuations caused stock prices to detach from fundamentals over the long term, while attracting more institutions and retail investors to relay-buy into the concepts.
• Step 5: Fund misappropriation and unfinished projects. Investigations and judgments showed that the proceeds from fraud and manipulation were continually reinvested into acquiring shares of Bamboo Airways and FLC-affiliated companies, repaying personal debts, decorating private residences, and further manipulating the stock market. Homebuyer prepayments and investor subscription funds were shifted within the group, causing the real estate project funding chain to snap. Projects like Ha Long Bay still have over a thousand homebuyers waiting indefinitely for property ownership certificates, forming a complete chain of listing fund-raising, asset shifting, and project abandonment.
• Step 6: Gambling compensation for sentence reduction. After receiving a cumulative 21-year sentence in the first instance trial in August 2024, the mastermind—through family members—paid over 140 billion Vietnamese Dong in compensation and promised to fully cover the losses, leading the 2025 appeal trial to drastically reduce the prison sentence for fraud to 7 years along with a fine. This step reveals the significant impact of active restitution on sentencing within the Vietnamese judiciary, sparking discussions on the negotiated reduction of illegal costs and becoming the focus of law enforcement and public controversy in 2026.

红旗信号（看到这些快跑）

• 🚩 Severe divergence between registered capital and paid-in capital: Prospectuses and capital verification reports showing registered capital hundreds of times greater than paid-in capital, with no ability to provide third-party inquiry letters or bank statements for verification, serving as a hallmark flaw of the ROS case.
• 🚩 Stock prices repeatedly hyped and detached from fundamentals: Stocks fluctuated upward across aviation, real estate, and infrastructure themes, but earnings profits and cash flows failed to support market capitalization over the long term, with price-to-earnings ratios far exceeding industry peers.
• 🚩 Typical cross-trading indicators on the market: Frequent occurrences of huge buy orders being canceled in a flash, concentrated surges near market close, and abnormally high turnover rates and account concentration, suspected to be self-trading to fabricate false transactions.
• 🚩 Unclear flow of financing funds: A large portion of raised funds flowed to affiliated companies, acquisitions of listed company shares, or personal assets of the actual controller, with project presale funds and engineering progress failing to reconcile on the books; the Bamboo Airways share acquisition falls under this type of fund shifting.
• 🚩 Inability to process property ownership certificates for real estate projects over the long term: Despite hot project sales, red books remain unavailable, indicating that land use fees or construction funds were misappropriated, and developers were required by the government to fulfill financial obligations first before certificates could be issued.
• 🚩 Excessive reliance of the actual controller on capital market blood transfusions: Frequent stock splitting, pledging, reducing holdings, and repurchasing, with operating cash flow maintained by newly raised funds; once the financing chain breaks, the Ponzi nature is exposed.

真实案例

• ROS Capital Inflation and Fund-Raising Case: Between 2014 and 2016, FLC Faros inflated its registered capital from an actual contribution of about 1.2 billion Vietnamese Dong to 430,000 billion Vietnamese Dong and listed on HOSE, cumulatively selling about 391 million shares to approximately 25,853 investors. On August 6, 2024, the People's Court of Hanoi sentenced mastermind Mr. Trinh in the first instance trial to a total of 21 years in prison for property appropriation via fraud amounting to approximately 362.1 billion Vietnamese Dong (approx. $1.44 million), with 49 other defendants listed as accomplices, and ordered the return of tens of millions of dollars to tens of thousands of retail investors. (Source: [https://www.mps.gov.vn/bai-viet/bo-cong-an-thong-bao-ket-qua-dieu-tra-xu-ly-vu-an-xay-ra-tai-cong-ty-cp-tap-doan-flc-d22-t36724](https://www.mps.gov.vn/bai-viet/bo-cong-an-thong-bao-ket-qua-dieu-tra-xu-ly-vu-an-xay-ra-tai-cong-ty-cp-tap-doan-flc-d22-t36724))
• Five-Stock Manipulation Case: Between 2017 and 2022, the mastermind controlled five stocks—FLC, ROS, ART, HAI, and AMD—through approximately 190 to 500 accounts. At the end of March 2022, the Ministry of Public Security of Vietnam initiated a case and detained the mastermind on charges of securities market manipulation and concealing information on securities activities, later adding the charge of property appropriation via fraud. The 2024 first instance trial identified illegal profits of approximately 72.3 billion Vietnamese Dong, sentencing the manipulation charge to 3 years with a fine, to be served concurrently with the fraud charge. (Source: [https://www.mps.gov.vn/bai-viet/bo-cong-an-thong-bao-ket-qua-dieu-tra-xu-ly-vu-an-xay-ra-tai-cong-ty-cp-tap-doan-flc-d22-t36724](https://www.mps.gov.vn/bai-viet/bo-cong-an-thong-bao-ket-qua-dieu-tra-xu-ly-vu-an-xay-ra-tai-cong-ty-cp-tap-doan-flc-d22-t36724))
• Homebuyer Property Ownership Certificate Dispute Case: As of September 16, 2025, CafeF reported that over 1,000 investors and homebuyers in the FLC Tropical City Ha Long project were still waiting for their property ownership certificates, with local authorities explicitly requiring the developer to fulfill financial obligations before issuing certificates, directly reflecting how homebuyers fall into a lengthy waiting period for recovery after presale funds are misappropriated.
• Appeal Retrial Controversy Case: The 2025 appeal trial ruled that the mastermind had paid over 140 billion Vietnamese Dong in compensation through family members, fully or mostly covering victims' losses, and drastically reduced the prison sentence for fraud from 18 years to 7 years with a fine of 400 million Vietnamese Dong. The Ministry of Public Security of Vietnam emphasized that FLC Group itself was not criminally prosecuted, and the illegal acts were deemed individual actions.

Official Stance

• End of March 2022: The Ministry of Public Security of Vietnam (C01) announced the prosecution and temporary detention of FLC Group Chairman Mr. Trinh on charges of securities market manipulation and concealing information on securities activities. In April 2022, additional charges of property appropriation via fraud were added, officially kicking off concentrated law enforcement against real estate and securities violations.
• August 6, 2024: Following a two-week first-instance trial, the People's Court of Hanoi delivered its verdict, sentencing the mastermind to a total of 21 years in prison (18 years for fraud, 3 years for manipulation), naming 49 defendants as accomplices, and ordering the return of tens of millions of dollars to tens of thousands of retail investors, marking another landmark financial mega-case in Vietnam following the Truong My Lan case.
• 2025: The Ministry of Public Security of Vietnam published an official announcement on its website regarding the investigation and handling results of the case, confirming that the appeal trial reduced the mastermind's sentence to 7 years in prison and a fine due to full compensation, while clarifying that the group level was not criminally prosecuted and criminal responsibility was attributed to individuals, thereby establishing a legal boundary between individual illegal acts and corporate operations in the market.

How to Protect Yourself

• ✅ Verify paid-in capital before subscribing to IPOs: Before subscribing to new shares or participating in refinancing in Vietnam, log onto the official websites of the State Securities Commission and the stock exchange to check prospectuses, capital verification reports, and bank statements. Any instance where registered capital vastly exceeds paid-in capital without third-party inquiry confirmation should be strictly avoided.
• ✅ Cross-verify concepts with operational data: Compare stock price trends with hard data such as contemporaneous financial reports, project presale filings, and airline passenger volumes. Do not participate in relay-buying for theme stocks driven solely by stories without profit growth, and be especially vigilant against abnormal surges during the rotation of aviation, real estate, and blockchain concepts.
• ✅ Identify cross-trading block indicators: Observe flash-cancellations of large block orders, surges near closing, and account concentration, cross-checking them against manipulation account lists published by regulators. If you suspect your holdings are being manipulated, liquidate immediately, report to the exchange and securities commission, and keep records.
• ✅ Ensure housing funds enter escrow accounts only: When purchasing off-plan properties in Vietnam, insist on depositing prepayments into legally mandated escrow accounts rather than the developer's general accounts. Clearly define deadlines for property ownership certificate processing and default refund clauses in contracts, and regularly check presale filings and construction progress to prevent funds from being diverted for affiliated acquisitions.
• ✅ Set hard stop-losses and retain evidence: Keep exposure to a single developer or single stock within 10% of household net assets. Exit immediately once a listed company is investigated or warned by the exchange, while retaining transaction records, promotional materials, and announcement screenshots to secure evidence for subsequent civil litigation.