On the morning of January 7, after two days of trial, a representative from the Hanoi People's Procuracy presented the indictment for 18 defendants in a case involving the production and sale of over 4.5 million fake milk cans. The scheme generated 2,400 billion VND in profits and involved Z Holding Company and its ecosystem of related companies.

The three founders of Z Holding, Hoang Quang Thinh, La Khac Minh, and Nguyen Van Minh, are accused of three crimes: violating accounting regulations causing serious consequences, producing and trading counterfeit food, and money laundering. In summary, the Procuracy recommended the court sentence Thinh to 25-28 years in prison, Khac Minh to 21-24 years in prison, and Van Minh to 23-26 years in prison.

In the same case, the Procuracy recommended sentences for 15 other individuals for violating accounting regulations causing serious consequences or producing and trading counterfeit food, with penalties ranging from a minimum of 12-18 months of probation to a maximum of 7-8 years in prison.

Regarding civil liabilities, the Procuracy proposed that Thinh, Van Minh, and Khac Minh must return all proceeds from their criminal activities, after deducting the cost of goods sold and production expenses.

A Procuracy representative at the court. Photo: Linh Dan

During earlier questioning, Thinh stated that the Z Holding "ecosystem" comprised: four joint-stock companies, 19 companies owning brands and selling online, 26 sales systems, 208 sales groups, and 179 individual businesses directly selling products to consumers.

Before 2023, Z Holding outsourced manufacturing to several factories for its nutritional products, dietary supplements, and special dietary foods. The company's leadership then decided to establish its own factory to control product quality, leading to the creation of Nature Made Company. This factory was built to produce and trade the items previously manufactured under contract.

Thinh claimed that when he opened Nature Made, he served only as a general manager without production expertise. He entrusted responsibilities to individuals with long-standing experience in the field. He felt secure and confident in the product quality and the factory's proper operation.

However, to reduce costs by 15-20% compared to similar products outsourced to other companies, the leadership team instructed subordinates to develop formulas and calculate raw material and production costs based on the desired price reduction. They then used the cost of goods provided by employees to approve the final market selling price of the products.

Hoang Quang Thinh, Chairman of Z Holding Company's Board of Directors, being escorted to court. Photo: Pham Du

Defendant Pham Duy Tan, Nature Made's Production Director and Head of Research and Development (R&D), was chosen to "create" new milk formulas for in-house production at the new factory. When questioned about the basis for these new milk formulas, specifically if he referenced other brands or scientific research, Tan responded that he "thought them up himself, mixed them harmoniously." Tan stated he did not consult any sources, conduct trial productions, or perform any testing.

The Supreme People's Procuracy accused companies within the Z Holding system of selling a total of 4.2 million units, including cans, boxes, and packages, of 22 types of counterfeit products, generating 2,018 billion VND in revenue. The unit price was calculated based on the average selling price of each product. The pre-tax profit was 319 billion VND.

From the proceeds, Thinh personally benefited by 63.2 billion VND, while deputy directors Van Minh and Khac Minh received 46 billion VND and 40 billion VND, respectively. The remaining funds were distributed among other individuals and allocated to various Z Holding Company funds.

In addition to these actions, the three Z Holding leaders are also accused of concealing over 7,825 billion VND in actual revenue, causing a loss of over 1,633 billion VND in taxes to the State. The group further laundered 83 billion VND under the guise of investment funds, stock transactions, and real estate purchases.