FLC Group inflated a subsidiary's capital 2,900x and listed it on Vietnam's stock exchange

FLC Group was one of Vietnam's most visible conglomerates, with holdings in property development, resorts, and Bamboo Airways. Its chairman, Trinh Van Quyet, was a flamboyant billionaire who drove Rolls-Royces and built stadiums. But the empire was built on a fraud. In 2014 Quyet acquired a shell construction company, Faros, and began inflating its registered capital on paper — from VND1.5 billion ($60,000) to VND4.3 trillion ($172 million), a 2,900-fold increase backed by fabricated documents.

The scheme succeeded because HoSE, the Ho Chi Minh Stock Exchange, approved Faros' listing without verifying the claimed capital. HoSE chairman Tran Dac Sinh knew Quyet personally and waved the checks through. In 2016, 430 million shares of Faros (ticker: ROS) began trading on the exchange. At their peak they were worth billions of dollars. Investors who bought them did not know the capital behind the shares was nearly imaginary.

Separately, Quytet directed his sister to open 500 stock accounts under the names of 45 associates, which were used to manipulate the prices of five FLC-related tickers. Large orders were placed and cancelled before matching, creating a false impression of demand. The manipulation generated VND723 billion ($29 million) in illicit gains.

The collapse began when the securities regulator started investigating FLC's disclosures. FLC shares were suspended in September 2022 for repeated disclosure violations. Faros was delisted the same month. By then 63,000 investors held Faros shares. Over 27,800 filed compensation claims for VND4.3 trillion ($171 million) in total losses. In August 2024 Quyet was sentenced to 21 years in prison. He paid VND2.5 trillion ($96 million) in compensation and his sentence was reduced to 7 years on appeal. Faros was worth nothing. The exchange officials who approved the listing were also convicted.