Top securities regulator fired amid Vietnam’s market probe

VIETNAM’S finance ministry fired its State Securities Commission chairman according to a posting on the ministry’s website, making him the highest-ranking casualty amid an ongoing investigation into stock trading.

Tran Van Dung was sacked for committing “serious wrongdoings,” the posting said. Deputy Finance Minister Nguyen Duc Chi will temporarily take charge of the commission from May 19, it said.

The move comes two days after Ho Chi Minh City Stock Exchange’s General Director Le Hai Tra was dismissed from the Communist Party.

Dung could not be immediately reached by phone for comment.

“It’s a big step to take and it’s all public” said Fred Burke, senior advisor at the law firm Baker McKenzie. “It sends a strong message: compliance with the law in terms of insider trading, transparency and enforcement of those rules.” This is probably the biggest market crackdown in the history of the nation’s stock market, he added.

Vietnam has launched a wide-ranging crackdown on securities violations as the Party’s Central Inspection Commission called for disciplinary action against a number of officials for alleged “violations and shortcomings” that resulted in market manipulation and “illicit profits” between 2015 and 2020. Authorities are pushing for a new era of transparency that could lead to a status upgrade for the market and greater foreign investment.

The finance ministry on May 19 also took disciplinary action in the form of warnings against Vu Bang, former securities commission chairman; Nguyen Thanh Long, chairman of the members’ council of the Vietnam Stock Exchange; and Nguyen Son, chairman of the Vietnam Securities Depository, the posting said. 

Since late March, police have also detained a number company executives including the former chairman of Bamboo Airways and its parent FLC Group JSC Trinh Van Quyet, Tri Viet Securities former chief executive officer Do Duc Nam and Louis Holdings former chairman Do Thanh Nhan. The finance ministry has said a brokerage investigation would continue through 2022.

The State Securities Commission has ordered the Ho Chi Minh City and Hanoi exchanges to start disclosing proprietary trading of securities companies before May 23. They were also told to issue warnings and request listed companies disclose information when their shares show signs of increasing or falling by the daily limit in five to 10 trading sessions.

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Dung, born in 1965, was appointed chairman of the State Securities Commission in July 2017, according to finance ministry’s website. Prior to that, he was chairman of the Hanoi Stock Exchange and general director of the Ho Chi Minh City bourse.

“Some people are cynical and say it’s only political. Others say it represents a step up in the professionalism of the regulator,” McKenzie’s Burke said. “No matter what the motive, the market sees it as, you have to comply with the rules and these rules will be strictly enforced.” BLOOMBERG