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Vinaland stops issuing fund-raising certificates   2009-04-01 - SGT

Vinaland Investment Corporation has had to put on hold its pilot scheme called “certificates of housing economy” to finance two property projects in HCMC’s District 7 after the central bank’s HCMC branch had sent inspectors to probe the company’s activity.

Vinaland said in a statement on Monday that the company stopped issuing the certificates to comply with minutes done by the inspectors on February 27, which shows several faults and contain misleading information that may hamper the interest of certificate holders.

“Certificate of housing economy is a new method that you have never seen. Therefore, shortcoming is surely unavoidable in deploying the program,” Tran Minh Hoang, board chairman of the company, said in the statement.

The company has launched the scheme to raise capital for its condo projects by issuing certificates worth VND5 million each to its staff and some outsiders, with which the holder has the right to buy apartment with payments to be made by installment.

Hoang reiterated that the company deployed the scheme to meet demands of homebuyers as well as to give a chance to low-income people to own an apartment without having to spend large amounts of money all in once.

However, the scheme was soon an issue in the local media which said such certificates dodged a regulation that bans property firms to mobilize capital before finishing the key foundation of their condo projects.

According to the minutes, Vinaland’s certificates are neither a form of savings, nor valuable papers, nor savings certificates. Therefore it might cause disputes.

As of February 20 this year, 66 customers had registered some VND2 billion to buy the certificates, according to the minutes.

Vinaland said it sent a notice to its customers informing them of a halt to the certificate program, and advised them either to take back the money or sign a borrowing contract and a debt certification with the

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