Vietnam police raid offices of biggest pawn shop operator after 'violations'

Some of the 830 shops operated by F88 were found overcharging clients with extra fees, using “extortion” methods in debt collection. - F88

HANOI (Reuters): Hundreds of police in Vietnam on Monday (March 6) raided the Ho Chi Minh City offices of F88 Investment JSC, the country's biggest pawn shop operator, following public complaints about "administrative violations", the Ministry of Public Security said.

Some of the 830 shops operated by F88 had been found overcharging clients with extra fees, the police-run ministry said, while online newspaper VnExpress reported the company had used "extortion" methods in debt collection.

"Police forces at provincial levels have recently broken up several organised crime rings of debt collectors," it said in a statement, adding that hundreds of thousands of people had been threatened to repay their debts.

F88 on Tuesday said it was closely coordinating with the authorities.

"According to initial information, the authorities were collecting information for an investigation into an F88 employee," it said in a statement.

The company was planning to launch an initial public offering with a market capitalisation target of US$1 billion, according to some media reports.

Among its shareholders is Vietnam-focused private equity fund, Mekong Capital. F88 announced last week it had raised US$50 million of fresh funding from Mekong Capital and Vietnam-Oman Investment Fund.

Mekong Capital said it had been informed by F88 that its operations were following applicable procedures and regulations, and that F88 would take strict disciplinary measures in the event of a violation.

"Currently, F88 is actively coordinating and providing information with the authorities to investigate and clarify the case," Mekong said in a statement, adding that it had not been informed of any irregularities.