Midnight raid finds documents relating to a range of fraudulent activities.
The Hai Phong Police Department and officials from the Ministry of Public Security raided the Hai Phong branch of the BBG Gold Trading Company at midnight on May 29 and then eight of its 19 branches were raided on May 31, where many documents were found relating to fraudulent trading activities in Hai Phong, Ho Chi Minh City, Nghe An, Da Nang, and elsewhere.
Its website closed on May 30.
An arrest warrant was also issued for Le Minh Quang, 32, who is the Chairman of the Board and CEO of BBG on May 29
After five years in the business BBG had developed rapidly and set up numerous subsidiaries in cities and provinces throughout the country, including 19 branches with more than 600 employees, trading in gold bullion, jewelry, precious stones, precious metals, and foreign currency exchange, as well as providing gold trading advice and credit.
The company's activities relating to gold trading including gold bailment, with interest rates of 1.8 to 11.5 per cent per annum (paid monthly) or 2.2 to 13.8 per cent per annum (paid annually), depending on the term.
In its gold trust agreements interest rates were from 3 to 21.5 per cent per annum, depending on the term. Profits are calculated monthly and weekly, and on Mondays the company announces the amount of money investors will receive. With this method BBG attracted hundreds of investors, who allegedly contributed around VND600 billion ($27.51 million).
To keep its investors BBG also provided them with "virtual" loans, with the company being their representative in the gold market. If a profit was made, however, customers could not withdraw this sum, but if losses were made the customer was held responsible. Many customers continued to take out these "virtual" loans in the hope that BBG would eventually pay the profits, which in nearly all cases it never did.
The case is under investigation.