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Corporate fraud in the Vietnam upcom stock market: a case study of the Central Mining, Mineral Exporting and Importing Company
Date Issued:
2017
Author(s):
Nguyen Nhat Anh
FSPPM
Abstract:
The case of MTM shows a number of fraudulent behaviors by controlling shareholders including: (1) The reconstruction of human resource before listing; (2) Having no major shareholder - holding more than 5% of the chartered capital - but the power is concentrated; (3) Using the brand and pictures makes confusion with another company; (4) Increasing the regulated capital in the short term; (5) No core business or production, mainly the joint venture or capital contribution; (6) The external audit accepted despite of the fact that financial statements have the problems; (7) The business situation is not good but the price and volume of stock trading is still high; (8) Tax obligation and social insurance are not completed. In conclusion, the thesis strongly recommends the policies to reduce the likelihood of expropriation of minority shareholders due to the principal-principal agency conflicts and these fraudulent behaviors.