Head of state-owned bank arrested for neglect of $187 mln bad loan

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Pham Thanh Tan (second from right) at an Agribank function

Vietnamese police have revealed some details about the arrest of a former head of the country's only fully state-owned lender, Agribank.

At a review meeting on white-collar crime Wednesday, they said Pham Thanh Tan, former general director of the Vietnam Bank for Agriculture and Rural Development, was arrested last year for his involvement in a bad debt of VND3.9 trillion (US$187.2 million) at a Hanoi branch.

They did not say when he was arrested.

He faces a charge of "irresponsibility causing serious consequences."

Tuoi Tre newspaper reported Thursday that Tan and several senior bank executives were arrested for giving the loan to a loss-making company, Lifepro Vietnam.

The Ministry of Public Security earlier arrested Pham Thi Bich Luong, 44, then director of the South Hanoi branch that gave the loan in 2007, for "lending violations." 

Lifepro, a foreign joint venture, closed down last October.

The loan was given to set up a garment factory in nearby Ninh Binh Province. The plant operated for a few months before closing last August, and its foreign director fled the country.

Not a dong of the principal or interest has been paid.

Investigations found that the branch had failed to assess the project properly, leading to the loss of money.

Tan, who was deputy general director of Agribank from early 2008 before becoming general director in June 2009, was derelict in his job of assessing the loan.

He was transferred to the State Bank of Vietnam in July 2011.

The country's largest bank by assets, Agribank reported a bad-debt ratio of 6.1 percent at the beginning of last year, the highest among Vietnamese commercial banks.

But Tien Phong newspaper said in December it has been reduced to around 4 percent.

Many senior executives of the bank were arrested last year in several massive embezzlement cases each worth at least a million dollars.

In November the Ho Chi Minh City police arrested three senior executives for stealing $960,000 from the bank, while city prosecutors charged four others in a $5.33 million scam.

Another executive was arrested in the city in October for allegedly stealing $1 million.

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In July a court in Binh Dinh Province handed a life sentence to a teller for stealing nearly $1 million.

That came just 15 days after a Hanoi court sentenced one employee to death and two others to life for embezzling more than $2.18 million.

The Ministry of Public Security in May arrested Do Duc Hung, 56, former director of a Hanoi branch and two employees for allegedly stealing more than $16.60 million.

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