WSS to defend PVFI proceedings

Wall Street Securities (WSS) has been sued by PetroVietnam Trade Union Financial Investment Company (PVFI) in the Hanoi court for allegedly failing to return around VND100 billion ($4.83 million) under a financial cooperation agreement signed back in 2009.

WSS deputy general director Pham Duc Long said that WSS and PVFI signed a cooperation agreement on May 13, 2009 in which PVFI became financial provider to WSS clients to trade listed stocks.

The lion’s share of the capital borrowed by WSS clients has been paid back to PVFI but the investment firm claims around VND74 billion ($3.58 million) remains outstanding.

This sum relates to the dealings of Nguyen Thi Thu Quynh, a former PVFI financial department director’s stock investments.

Long explained that PVFI had assigned Quynh to help WSS decide which WSS clients would be allowed to borrow PVFI cash to trade in stocks. He claimed the department director had taken advantage of her position to illegally use PVFI cash to trade stocks via Wall Street Securities.

He said WSS had cooperated with PVFI to hand over all stocks owned by Quynh to PVFI and that blame could not be laid at the company’s feet for Quynh’s activities.

“However, PVFI issued proceedings requiring WSS to pay back Quynh’s loan. WSS believes the PVFI proceedings are not correct and unreasonable as PVFI held onto all the stocks bought by its staff,” Long told VIR.

Long explained that when WSS clients were allowed to borrow PVFI cash, they had to sign agreements with WSS after which PVFI would consider whether to disburse funds or not. In Quynh’s case, WSS could not ascertain whether her money flowed from PVFI sources or was her own.

“Quynh had to be in cahoots with WSS staff when she did wrong. Therefore, WSS has no [financial] obligations,” said Long.

PVFI director Vu Quang Hai declined to comment on WSS, but said his company was working with relevant authorities and the court to resolve the issue.

“The question as to who is right or wrong here must be based on legal documents, evidences and authorised decisions,” said Hai.

WSS posted a net profit of VND780 million ($38,000) and revenue of VND31.6 billion ($1.5 million) in the first nine months of this year, down 98 per cent and 70 per cent year-on-year, respectively, the firm reported in its financial statements.

On November 30, WSS stocks closed at VND4,700 a share, or 53 per cent lower than their face value of VND10,000.