Oct 19, 2012

Vietnam - Investment trust offers 30pct interest rate, experts wary

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A “smart savings” program has recently been advertised on some websites, saying that depositors can enjoy a whopping interest rate of 22 to 30 percent if they join in an investment trust offered by a financial investing company.

“Anyone having the need to deposit money to receive high interest can get it via the GP Vietnam Investment Co Ltd. The company gathers a number of financial experts who have graduated overseas,” a post on yeutretho.com reads.

The ad continues by introducing the “investment trust” package, where people can deposit their money for a term of at least one month to enjoy interest rates of 22 to 30 percent a year.

The appealing ad has successfully caught the attention of many website readers.

‘Invest in world financial market’

Tuoi Tre reporters under the disguise of depositors visited the GP Vietnam’s headquarters on floor 12A of the CDC building, 25 Le Dai Hanh, Hai Ba Trung District, Hanoi, and were received by its CEO, Nguyen Minh Giang.

The CEO said the company will prioritize using the deposits from customers and its own equity to “invest in the world financial market.”

“Particularly, we will invest in the stock exchanges in the US and Australia,” he said.
Giang also admitted that he has received only a few of customers.

“Most of the depositors are my friends and relatives,” he said.

The investment trust contract composed by GP Vietnam Co states that depositors will receive a monthly interest rate of 2.15 percent at the end of the savings term, and it is not allowed to cancel the contract before maturity.

“The contract can only be liquidated before maturity with agreement from both the company and depositors,” the document said.

GP also functions as an intermediary to connect local investors with their international investment funds. Local investors will open a Visa account and transfer their money to the funds, in order for the latter to invest in the international stock exchanges.

However, Giang denied running the investment trust when Tuoi Tre officially contacted him via telephone, saying GP Vietnam only functions as an investment consultant.

He then immediately said he was busy and hung up the phone.

Against the law

Truong Ngoc Anh, chief of the secretariat of the supervisory agency under the State Bank of Vietnam, said GP Vietnam is going against the law if it is actually operating the investment trust.

“Under the Law of Credit Institution, only credit institutions are allowed to conduct investment trust activities,” he explained.

“Any businesses wishing to operate an investment trust has to set up a credit institution and acquire the license from the SBV.

“The SBV has so far granted no license for the GP Vietnam Co,” he added.

Anh said no businesses can gain high enough revenues to repay interest at the supposed 22 to 30 percent rate.

Meanwhile, financial expert Bui Kien Thanh said high profits are always accompanied by high risks.

“The public should stay cautious against programs that offer such high interest rates,” he advised.

TUOI TRE


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