Ocean Bank Chairman Ha Van Tham, one of Vietnam’s richest businessmen, was arrested for failing to address lending violations that had been brought to his attention by the central bank, the government said Wednesday.
The central bank ordered Tham to address several lending violations at his bank to improve operations; but he failed to do so, Nguyen Van Nen, Minister and Chairman of the Government Office, said at a press briefing in Hanoi on Wednesday.
For that reason, the central bank’s inspectors proposed the police deal directly with the case, Nen said.
“The government’s approach to economic violations provides [violators] with opportunities to fix them. Only when [the violators] fail to do so, are [stronger] measures needed,” he said. “The government seeks to avoid criminalizing economic activity whenever possible. Investigations [into the Tham's conduct] are ongoing and conclusions will be announced in the coming time.”
Tham is being investigated for “violating lending regulations,” Nen said.
If he's found guilty, Tham could face up to 20 years in prison, under Vietnam’s penal code.
Ha Van Tham, then Chairman of the private Ocean Bank, speaks at a meeting in Hanoi January 21, 2011. Photo credit: AFP
Tuoi Tre (Youth) newspaper reported on Oct. 25, a day after Tham’s arrest, that the Ocean Bank chairman had approved a VND500 billion (US$23.5 million) loan to the Trung Dung real estate firm in 2012 without securing proper collateral. Trung Dung is likely to default on the loan, Tuoi Tre said.
Tham will be held for four months pending an investigation, police said.
The US-educated banker had served as chairman of the Hanoi-based bank since 2007.
He also held a position as Chairman of the Ocean Group conglomerate and hotel operator Ocean Hospitality.
Ocean Group holds a 20 percent stake in Ocean Bank and more than 75 percent in Ocean Hospitality, Ocean Securities, Ocean Media, Ocean Retail, and commodity exchange INFO, the group says on its website.
Tham, the 8th richest man trading on Vietnam's exchange at the end of 2013, had won several national awards for outstanding entrepreneurs.
Last week, the central bank said Ocean Bank’s business would remain unaffected by Tham’s case.
The bank's board dismissed Tham from his post on October 23, a day before his arrest, and appointed General Director Nguyen Minh Thu as its new chairman, according to announcements made by the central bank.
Ocean Bank, founded in 1993, announced in April that it aims to raise its registered capital from VND4 trillion (US$188 million) to VND5.35 trillion ($252 million) by this December.
It posted a pre-tax profit of VND232 billion ($10.9 million) last year.