MoPS launches prosecution against Huy Nhat for fraud

17:05 | 19/05/2020

YKVN Lawyers represents four foreign investors who filed a lawsuit against Huy Nhat (the founder of Huy Vietnam that was caught up in a huge scandal for closing down the Mon Hue restaurant chain) for alleged fraud and the appropriation of $25 million through a made-up real estate development project in Lang Co in the central province of Thua Thien Hue.

mops launches prosecution against huy nhat for fraud
The founder of Mon Hue, Huy Nhat, has been sued by four overseas investors

In 2018, Huy Nhat contacted four foreign investors, including MF Holding Inc. (MF), Gifted Wisdom Ltd. (Gifted), Harvest Investment Advisory Co., Ltd. (Harvest), and Fenghe Harvest Ltd. (Fenghe), to mobilise investment for a resort project named Horizon Langco in Lang Co town, Thua Thien-Hue province. According to Huy Nhat, this 162-hectare project was owned by Horizon Property Group Single Member Co., Ltd. (Horizon Vietnam), a firm owned by Huy Nhat with a head office in District 2, Ho Chi Minh City.

To convince the investors, Huy Nhat assigned Nguyen Luong Hoang, general manager of Horizon Vietnam to organise many project introduction events abroad, explain the related profitability indicators, and provide detailed reports about the project, products, and sales, among others. Via verification, it is known that these reports were fake and that there was no project at all.

The four investors were invited to join with Huy Fong Capital Ltd. (Huy Fong) to invest in Horizon Vietnam Property Pte. (Horizon Singapore), becoming shareholders in the firm. Both the Hong Kong-based Huy Fong and Singapore-based Horizon Singapore are actually owned by Huy Nhat.

Afterwards, Horizon Singapore signed an agreement to lend Horizon Vietnam $25 million to implement the resort project in Lang Co. To keep investors' trust and hide the fact that both Horizon companies were of Huy Nhat, he committed that the purpose of this loan was only to invest in the resort project. Huy Nhat also promised that the loan would be turned into Horizon Singapore’s capital share in Horizon Vietnam and that by transferring the charter capital to Horizon Singapore, the investors would gain profit and become the legal owners of the resort.

The sides have signed a loan agreement (for the $25 million loan to Horizon Vietnam) and a Shareholder Agreement, internally signed between the investors and Huy Fong. The latter agreement detailed each person's capital percentage contributed to Horizon Singapore to invest in land/assets at Lang Co, Hue.

According to the loan agreement, MF lent Horizon Vietnam $10 million, Gifted $10 million, Harvest $2 million, Fenghe $3 million, and Huy Fong $17 million. The four investors transferred $25 million to Horizon Singapore, which then transferred the money to an account of Horizon Vietnam opened in Vietnam.

In the middle of October 2019, Vietnamese media reported that Huy Nhat's Mon Hue restaurant system was insolvent. The four foreign investors tried to contact Huy Nhat but failed. After checking the balance of the bank account of Horizon Vietnam opened at Vietcombank, they found that less than VND300 million ($13,043) remained. Looking deeper into Horizon Singapore's business, they found that its business registration license was not updated to include the four investors’ names as committed by Huy Nhat.

They also learned that there is no project in Hue as no land belongs to Huy Nhat that matches the description in the project introduction file.

The investors have denounced Huy Nhat to the Ministry of Public Security for fraud and appropriation of property. After verification, the Ministry of Public Security has decided to prosecute Huy Nhat on April 17, 2020 and keep the investors notified.

The government and law enforcement agencies of Vietnam, Singapore, and China have also taken action to assist the investors in tracking down Huy Nhat and his assets.

Van Anh

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