SSC fires a shot across VSH’s bow

Some analysts claim the infant market needs better policing

According to the SSC, Vinh Son-Song Hinh (VSH), which ranks third in terms of market cap among 52 stocks listed on the Ho Chi Minh City securities trading centre, has broken the law on purchasing stock shares.
In early August, VSH planned to spend VND60-70 billion ($4.37million) to buy back two million shares on the market in order to stop its price decreasing.
The company registered the purchase with the SSC. But, VSH then announced at the end of September that it had failed to carry the purchase through during the stated window of August 7 to September 15, without giving any explanation.
The VSH management board later sent a report to SSC, citing the reasons why it could not buy back the stock shares. It claimed that the market share price at that moment exceeded the highest acceptable purchasing price approved by VSH management, at VND30,000 ($1.9) per share. SSC rejected the explanation.
The Ho Chi Minh City securities trading centre has this year uncovered many violations in securities transactions. In the first half of the year, the centre’s administrators discovered 43 cases of the same share items being sold and bought on the same day, a remarkable increase over the 38 violations unveiled in 2005.
Also during the period, 803 cases were discovered of investors opening multiple accounts for transactions. According to the current regulations, each investor can open only one account at one securities company.
Many cases of violations have been unveiled but there has been no official information released about the breaches and possible punishments. SSC said that one enterprise even issued shares to raise its chartered capital without permission.
Many market watchers fear that, in the first stages of the stock market’s development, the penalties are not strong enough to deter violators.
Securities investors have asked the securities trading centre to make public the names of the individuals and institutions violating regulations.





No. 786/November 6-12, 2006