On 22/9, the Department of Anti-Corruption, Economic, and Smuggling Crime Investigation Police (C03), under the Ministry of Public Security, issued its investigation conclusions for a case involving fraud, bribery, and receiving bribes. The case centers on Egroup Education Group Joint Stock Company (Egroup), Egame Investment and Distribution Joint Stock Company (Egame), Nhat Tran Trading and Service Joint Stock Company, and other related entities.

Nguyen Ngoc Thuy, 43, the chairman of the board of directors and chief executive officer of Egroup, has been proposed for prosecution on charges of fraudulent appropriation of assets and bribery. Thuy gained prominence as an entrepreneur through his participation in the television program "Shark Tank Vietnam". He founded Egroup and the Apax Leaders education system, promoting a technology-applied education model with an emphasis on foreign languages and soft skills.

The investigation revealed that Egroup operated as an ecosystem comprising 20 subsidiaries, with Egroup serving as the central entity for capital mobilization, coordination, and investment. However, this ecosystem suffered from persistent instability due to its heavy reliance on financial leverage. Thuy's primary asset was the Apax Leaders English education system, which he allegedly used to enhance the company's image and attract capital.

From 2015 to 2023, Thuy reportedly directed the use of Egame's legal entity to promote Egroup. He leveraged his personal reputation to announce expansion into the education sector, urging customers to invest in Egroup with promises of high interest rates. After attracting investors, Thuy, representing Egame, would transfer shares to them at 38,000 VND per share. He committed to repurchasing these shares after one year at 42,000 VND per share, requiring investors to delegate all shareholder rights and obligations to him.

Thuy before his arrest. Photo: Egroup

Initially, Egame fully paid principal and interest on time for small, short-term investments, even offering gifts like money and gold during holidays. However, as the pressure to pay interest grew substantial and Egroup's projects failed to generate revenue, the company faced severe financial difficulties, eventually becoming unable to meet its obligations.

Between 2015 and 2023, Thuy sold over 206 million shares to more than 10,000 investors. He allegedly directed 70% of the collected funds to repay principal and interest on earlier contracts, aiming to avoid detection. The remaining 30% was used to settle personal debts, including bank loans and rent. Thuy is accused of fraudulently appropriating 7,677 billion VND.

In connection with the case, Tong Thi Kim Lien, chairwoman of the board of directors and chief financial officer of Nhat Tran Trading and Service Joint Stock Company, is accused of receiving bribes. Additionally, 26 other individuals, including accountants and business managers of Egame, are being prosecuted for fraudulent appropriation of assets.

Creating fictitious revenue

According to the investigation, in 2016, to bolster Egroup's image as a high-revenue enterprise and attract investors, Thuy collaborated with Lien to generate fictitious revenue. Nhat Tran, founded by Lien in 2014 in TP HCM, specializes in selling phone SIM cards from various network providers.

Lien agreed to the scheme under conditions: Thuy was to pay service fees, including a "reconciliation" cost calculated at 2% of the annual fictitious revenue, and cover other operating expenses such as a 0,03% bank transaction fee on funds Nhat Tran transferred to Egroup for "sales". Payments were made via bank transfer to Lien's accounts or in cash.

To maintain the appearance of profitability in Egroup's accounting records, Nhat Tran purportedly offered Egroup a discount ranging from 0,053% to 0,354% on phone card purchases. However, Thuy's group was required to return this entire difference to Lien. Utilizing this method, from 12/2016 to 9/2021, Lien instructed her subordinates to sign 12 fake contracts and issue fictitious value-added tax invoices. This enabled Egroup to record nearly 2,350 billion VND in fictitious revenue, accounting for 70% of its total reported revenue on financial statements.

Under their agreement, Thuy was supposed to pay Lien a total of 46,5 billion VND. However, due to a financial crisis and a lack of new investor funds, he only paid nearly 32 billion VND. Consequently, Thuy is accused of bribing Lien with 32 billion VND.