Alibaba Real Estate has encountered negative publicity about its business practices last year and this year, and this week, Nguyen Thai Luyen, President and Managing Director of the Saigon firm was arrested for allegedly tricking thousands of people to invest in non-existent real estate projects.
Nguyen along with Nguyen Thai Linh, who is his younger brother, were arrested after hundreds of police officers and at least eight military vehicles surrounded the company’s headquarters in Hiep Binh Chanh Ward, Thu Duc District.
|HCMC police surround Alibaba Real Estate prior to the arrest of company management|
According to citizen complaints filed with the police department, Nguyen and his accomplices created non-existent real estate projects in several southern provinces of the country and created a strategy after founding the company that relied on sales of these non-existent projects.
The company’s various real estate “projects” were illegal since they have never gone through a legal process of registration, and none of the projects been approved by authorities in the provinces where they were based. According to one media report, which has not been verified, more than 7,000 customers were persuaded into investing into the company’s projects and total investment losses are expected to exceed $100 million USD after a forensic accounting of the company’s finances has been conducted.
In early June, authorities in the southern province of Ba Ria-Vung Tau sent bulldozers to reclaim land plots from illegal real estate projects, but two employees of Alibaba protested and threw bricks at bulldozers and workers who were in the area. As a result of their disruptive activities, the two individuals were arrested and an investigation launched into the firm and its activities.
Alibaba claims to possess charter capital of $241 million USD (5.6 trillion VND) and claims to have more than 2,500 employees who are currently working on 48 projects different projects. The HCMC police as well as other government authorities are now investigating the company and it is expected that several managers and sales executives of the company who knew they were selling illegal projects will be arrested as the government’s case against the firm progresses.