Major Vietnamese Gold Traders Face Scrutiny Over Irregularities

Vietnam's Government Inspectorate has announced the discovery of numerous violations in the business operations of major domestic gold traders, Bảo Tín Mạnh Hải Company and Mi Hồng Company. These violations include receiving advance payments from customers without immediate gold delivery, which contravenes their business permits. Bảo Tín Mạnh Hải Company was also found to have miscalculated the cost of goods purchased, leading to tax evasion. Deficiencies in anti-money laundering (AML) measures were also identified, such as failure to report large transactions, inadequate collection and updating of customer information, and insufficient risk classification of customers. Mi Hồng Company, similarly, failed to report the cessation of gold bar trading activities at some of its branches to the State Bank of Vietnam. Furthermore, its website provided inaccurate or incomplete information to customers about its products. This company also exhibited violations related to AML measures. These findings suggest potential contributing factors to the complex price fluctuations in Vietnam's domestic gold market and significant deviations from international prices. The Government Inspectorate has recommended to the Prime Minister that decisive actions be taken against market manipulation, hoarding, price gouging, smuggling, speculation, and illegal trading. The establishment of a gold exchange in Vietnam to enhance market transparency and management was also proposed. Additionally, suspicions regarding seven individuals selling approximately 2.084 trillion VND (around $82 million USD) worth of unverified gold have been forwarded to the Ministry of Public Security for investigation and processing. Other major gold traders like SJC, PNJ, and DOJI were also cited for violations in accounting practices and tax declarations. Under Vietnam's one-party system, while economic growth is prioritized, market stability and the crackdown on illicit activities remain critical issues. The gold market, being a traditional means of wealth accumulation for citizens, is also prone to speculation and irregularities, leading the government to implement strict oversight. The recently uncovered violations undermine the integrity of this market, necessitating intensified government supervision and enforcement of laws. Source: VnExpress