Vietnamese Police Raid Financial Firm, Investors Demand Refunds
Background
Demonstrations in communist Vietnam are relatively rare. However, a recent incident has drawn attention to the country’s financial sector. Vietnamese police have raided a financial firm, GFDI Company, which is believed to owe nearly US$150 million to investors.
The Incident
On Saturday, the Ministry of Public Security (MPS) issued a statement saying that they were investigating GFDI Company over "illegal capital mobilisation and fraud." The company, which was established in Danang in 2018, owed 7,500 customers a total of US$147 million.
According to the MPS, GFDI had been borrowing money from people through property lending contracts at high monthly interest rates. After becoming insolvent in November last year, the company’s CEO allegedly ordered staff to begin a Ponzi scheme, an investment fraud that pays existing investors with funds collected from new investors.
Investors Demand Refunds
Days earlier, around 300 people, many from other provinces, had gathered outside GFDI’s headquarters and other offices in Danang, demanding their money back. The protesters were mainly individuals who had invested in the company, hoping to earn extra income.
In victim groups on Facebook and the Vietnamese messaging platform Zalo, investors discussed compiling evidence to file complaints. One victim wrote on a Facebook group, "I put all my trust in the company, having asked my family and friends to invest hundreds of millions of dong (tens of thousands of US dollars) to provide extra income to improve our lives. I became so confused and I cannot find my way in life, as I have lost everything."
Aftermath
It is unclear if GFDI’s CEO or any staff were taken into custody. The company could not be reached for comment. The MPS has promised to investigate the matter further and take action against those responsible.
Conclusion
The incident highlights the risks associated with investing in unregulated financial instruments. It also underscores the importance of financial literacy and due diligence when investing in the financial markets.
Frequently Asked Questions
Q: What is the total amount of money owed by GFDI to its investors?
A: The company owes 7,500 customers a total of US$147 million.
Q: What was the purpose of GFDI’s property lending contracts?
A: The contracts were designed to allow individuals to borrow money at high monthly interest rates.
Q: What is a Ponzi scheme?
A: A Ponzi scheme is an investment fraud that pays existing investors with funds collected from new investors.
Q: What is the current status of GFDI’s CEO and staff?
A: It is unclear if GFDI’s CEO or any staff were taken into custody.