https://www.reddit.com/r/VinFastComm/comments/1gpkjrk/what_i_predicted_5_months_ago_has_just_become/

Here is what I wrote 5 months ago: Vuong Pham's next crazy move? : r/VinFastComm, quoted:

"Vuong Pham can forgive the debt from Vingroup to Vinfast at will. After all, he controls Vingroup, so his will is the order: he can just say to the chieft accountant: forgive the debt to Vinfast and it will happen as he has the majority of the votes. Of course, this will incur a huge loss to Vingroup and drive VIC to 10K/share and cause a margin call / collateral falling below required threshold. Technically, the way this is done legally is that he order the conversion of Vinfast's debt hold by Vingroup/Vinhomes to VFS shares, which is what he had actually done in the past with VFS! This will further dilute the VFS shares. But this dilution has little meaning because Vuong Pham owns 98% of Vinfast anyway, and this act will bring his onwership, indirectly through VIC, VIG, Asian stars, to 99.9%. Vinfast is all his all the time, he gain nothing, he lose nothing regarding Vinfast's control. This move is to make the book look better, but it will show his desperation. This move also come at a huge cost to VIC.

So this move, free gift or debt to share conversion can theoretically reduce the debt and alleviate the interest payment, but at a huge hit to VIC. And further, this act is only to prolong the inevitable: Vinfast is destined to bankrupt because the cars are not competitive. Forgiving the debt won't make the cars more competitive.

I make this post for the record so when Vuong Pham plays this crazy, kamikaze move, you will know in advance."

Today, Vuong Pham is doing just that: convert 80,000 B VND in Vinfast debt to VFS per report: Tỷ phú Phạm Nhật Vượng cam kết tài trợ tiếp 50.000 tỷ đồng cho VinFast trong 2 năm tới, Vingroup cho vay 35.000 tỷ đồng translation of the article: "At the same time, Vingroup will invest more in VinFast Vietnam by converting all existing loans of about VND80,000 billion into dividend-entitled preferred shares".

In short, it happens exactly as I predicted 5 months ago, and the analysis that I had already done 5 months ago is just as correct and relevant as of today: this crazy move reduces the debt of VFS to make the book looks better. This is a financial trick just to massage the accounting book. In reality, it is just left hand to righ hand, Vuong Pham is forgiving Vuong Pham himself. On paper, the VFS debt becomes lower and Vinfast foregoes the interest payment to VIC, at the expense of VIC (to outside shareholders). For Vuong Pham, just left hand to right hand. No wonder foreign holders of Vin stocks are running for exit like there is no tomorrow.

So the impact of this move is that the accounting book suddenly becomes better but the devil is in the detail, much like the pumped and stuffed sale number (a large portion of the sale is to related parties, i.e. Vuong Pham is selling to himself). Here, it is the same kind of trickery: Vuong Pham is forgiving Vuong Pham's debt. For lazy analysts and lazy people who do not know the detail, the number might suddenly look better. And by that, Vuong Pham hopes to lure in more clueless investors (no pro is buying his trick).

Vuong Pham is desperate and actually is despicable for the shady, crazy, and entangled financial tricks he used: he produces and the he self consumes, he borrow from himself and then forgive the debt to himself. This is not healthy and is a death spiral.

The latest crazy move show he is getting more desperate.

Let's see how many Vietnamese are being duped by Vuong Pham's latest financial trick.