Recently, land auctions in Hanoi have recorded many unusual points.
Recently, National Auction Joint Stock Company No. 5 and Vietnam Auction Joint Stock Company have just announced the suspension of organizing 3 auction sessions on December 7, December 14 and December 21 in Thanh Oai district (Hanoi).
This move came after Thanh Oai district decided to invite the police to investigate the failed auction of 22 plots of land in Do Dong commune on November 30.
After the land auction in Soc Son district, Hanoi police are temporarily detaining 5 subjects to investigate violations of regulations on property auction activities related to the bid of 30 billion VND/m2 in the land auction on November 29.
Lawyer Pham Thanh Tuan - Hanoi Bar Association said that the multi-round organization is creating loopholes that many people take advantage of to collude to raise or lower prices.
From August until now, except for the 10.8 session in Thanh Oai and two sessions in Phuc Tho, which were held in a single round of direct voting (all investors will write their bids at once), the remaining districts have held multiple rounds, at least 6-8 rounds with a price range of 3-6 million VND. The auction will end when no one else bids. This regulation is expected to prevent participants from colluding and winning at low prices.
According to lawyer Pham Thanh Tuan, there are currently no regulations to handle the case of investors paying unexpectedly high prices and then stopping the auction, leading to the failure of the auction. In fact, the handling only considers the deposit of the auctioneer. Administrative and criminal sanctions for these acts, if any, need to be clarified by the competent authority.
Loopholes in the auction method have led to market manipulation in some recent auctions. Police determined that in the November 29 auction in Soc Son, when seeing that the prices of the land lots exceeded the set price, Pham N.T. paid 30 billion VND/m2, causing the auction to fail. Paying a "sky-high" price in the 5th round and then dropping out of the 6th round helped the group not lose their deposit and have the opportunity to continue participating in the auction to buy the land lots they wanted. This loophole has caused this market manipulation to show signs of spreading.
Legal expert Nguyen Van Dinh commented that because the land price list of Hanoi and many other localities is currently too low, the starting price is very low, the deposit is calculated at 20% of the starting price is also very low, creating great attraction to attract many participants.
Many people are willing to "compete" and bid high prices with the mentality of "at most losing the deposit", creating "competition" in bidding and causing frustration, wanting to disrupt the auction like the example at the auction in Soc Son district.
Professor Dang Hung Vo - former Deputy Minister of Natural Resources and Environment commented that bidding high and then abandoning the deposit is becoming a "joke" with the law.
It is time to postpone land auctions until a separate law on natural resource auctions is enacted. Natural resources have different characteristics compared to ordinary goods. Next, the valuation of natural resources must be consistent with the market to prevent speculation and market manipulation.
