Vietnam's Apax Leaders branch linked to ‘Shark Thuy’ owes $630,000 in taxes amid $323mn fraud case

The branch, located at 435-437 Le Van Sy Street in Nhieu Loc Ward, is listed as no longer operating at the address, according to the taxman.

Its representative, Nguyen Ngoc Khanh, also serves as the legal representative of several other Apax English branches in Hanoi, Dong Nai City, and Ho Chi Minh City.

Apax Leaders belongs to the Egroup education ecosystem headed by Thuy, who rose to prominence through his appearance on the Vietnamese version of the business reality show Shark Tank, hence his nickname 'Shark Thuy.'

The once-expanding English language chain later faced widespread center closures, unpaid employee salaries, and complaints from parents over delayed tuition refunds.

The tax debt has come to light as Thuy and 28 other defendants face prosecution over an alleged investment fraud scheme involving nearly VND8.5 trillion ($323 million) and more than 10,000 investors.

From education empire to massive fraud allegations

The Supreme People's Procuracy recently issued an indictment against Thuy, chairman and general director of Egroup and Egame, and 28 other defendants.

Thuy and his associates allegedly devised a scheme to raise money from investors through the sale of fictitious Egroup shares, using the proceeds to repay debts, finance personal expenses, and sustain the group's business operations.

To build investor confidence, Thuy was accused of instructing his associates to inflate Egroup's charter capital to VND962.5 billion ($36.6 million) from VND32 billion ($1.2million) and fabricate revenue figures accounting for 70 percent of its reported annual revenue.

The figures helped portray Egroup as a large, diversified, and profitable business, while its expanding education network provided a visible demonstration of the group's purported success.

Investigators found that despite lacking sufficient assets and financial resources, Thuy directed Apax Leaders and Igarten Education JSC to continuously lease premises and expand their operations, eventually opening a combined 130 English language centers and Steam preschools nationwide.

The schools and centers became an important part of Egroup's investment pitch.

A network of 530 sales employees promoted the group's educational projects, highlighted its business performance, and invited prospective investors to visit its offices to learn about its operations.

Investors were promised annual returns of 15-20 percent and offered Egroup shares at VND38,000 ($1.44) each, with Thuy pledging to repurchase the money a year later for VND42,000 ($1.60).

To encourage employees to recruit investors, Egame introduced a commission scheme equivalent to five percent of the total investment amount, comprising three percent in cash and two percent in shares. Employees were also encouraged to convert their commissions into shares.

The more investors sales employees persuaded to purchase shares, the higher the commissions they could earn.

The extensive sales network was overseen by managers who directly supervised individual teams and were responsible for attracting and maintaining relationships with investors.

Initially, when the number of investors was relatively small and contracts had short terms, Egame was able to repay both principal and interest in full upon maturity.

However, between 2021 and 2023, English language centers and preschools within the Egroup ecosystem began closing one after another. 

As the number of new investors declined, incoming funds became insufficient to meet repayment obligations on maturing contracts.

Nearly $323 million allegedly appropriated

Investigation documents showed that more than VND51.44 trillion ($1.96 billion) was recorded on receipts related to Egroup share transfers between 2015 and 2023.

However, a single investment could be recorded multiple times if an investor renewed a contract instead of withdrawing the money upon maturity.

For example, when an investor agreed to reinvest the amount due for repayment, the company would issue a new receipt for the same funds. Repeated renewals would increase the cumulative value recorded on receipts without an equivalent amount of new money flowing into the company.

Of the total recorded value, nearly VND36.5 trillion ($1.39 billion) was associated with renewed share transfer contracts. The company also recorded more than VND8.5 trillion ($323 million) in returns paid to investors and over VND2.4 trillion ($91 million) in brokerage commissions.

Following additional investigations, authorities identified a total of 10,123 victims in the case.

Of these, 8,900 investors were still owed nearly VND8.5 trillion in principal, while 1,185 had received combined principal repayments and investment returns exceeding their original investments.

Tens of thousands of transactions were recorded through Egroup's sales network, which promoted share purchases with promises of attractive returns.

Thuy and his co-defendants have now been indicted on charges of allegedly fraudulently appropriating nearly VND8.5 trillion from investors.