Le Van Dung, chairman and general director of
Duoc Vien Dong Pharmaceutical Company, has been detained by police for alleged
securities price manipulation.

The company is listed
on the HCM City Stock Exchange as DVD.

This is the first
arrest in Viet Nam involving securities fraud since the country’s stock market
opened in 2000.

Dung made
transactions with other people to allegedly manipulate the price of another
pharmaceutical firm, the Duoc Ha Tay Company, listed on the Ha Noi Stock
Exchange as DHT.

The transactions were
alleged have been made via trading accounts opened by Dung’s younger brother Le
Van Manh and several other people.

The transactions
created false demand, and lured many investors into buying DHT shares at high
prices. They then suffered losses.

According to the
State Securities Commission, on June 21 Dung held 18.74 per cent of DHT’s VND41
billion (US$2.05 million) in chartered capital.

The Medi Investment
Company, a shareholder of DVD, also owned several per cent, as well as DVD
itself.

In all, they have a
stake of 28.68 per cent. Their purchases, as a group, are supposed to be made
public when they exceeded 25 per cent under current regulations. But they were
not, according to authorities.

DVD and a group of
shareholders continued their DHT buying, increasing their ownership to around 60
per cent, according to Tuoi Tre Newspaper.

They managed to
inflate the DHT price, from VND30,000 to VND100,000. DVD sold out its stake in
July.

Last Friday, DHT
shares closed at VND49,300.

In early September,
DHT officially blamed the price fall on manipulation by DVD and those people
associated with it.

The SSC suspended DVD
share issuance to the public for 60 days beginning November 19, basing its
decision on the incorrect, insufficient information in the prospectus.

Dung holds around 4
million out of the total of 11.9 million DVD shares.

Last Thursday, DVD
executive board relieved Dung of his position as the company chairman and
general director.

HOSE announced last
Friday that DVD shares would be put on alert as a way to protect investors,
saying Dung’s arrest might strongly affect the company’s operation.

VietNamNet/Viet
Nam News