Vietnam police probe 4 former ACB execs for fraud; banking clean-up underway

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Inspectors from the Ministry of Public Security Thursday said they have started investigating the possible involvement of four former Asia Commercial Bank officials in a fraud worth nearly VND719 billion (US$34.17 million).

Tran Xuan Gia, former chairman -- and Minister of Planning and Investment in 1996-2002-- and deputy chairmen Trinh Kim Quang, Le Vu Ky, and Pham Trung Cang are being probed for "deliberately violating state regulations on economic management, resulting in serious consequences."

But they have not been arrested because of their clean records, the inspectors said.

Gia, 73, Ky, 56, and Quang, 54, resigned from their posts two weeks ago.

Cang, 58, resigned as deputy chairman of the Vietnam Export Import Bank (Eximbank), which he had joined in 2010 after quitting ACB.

The four, together with Ly Xuan Hai, until recently the CEO of ACB, reportedly approved the transfer of some VND1 trillion ($47.53 million) to 29 banks to earn higher interest rates than regulated.

Nearly VND719 billion of it was deposited at the Vietnam Joint Stock Commercial Bank for Industry and Trade (VietinBank), and swindled by Huynh Thi Huyen Nhu, former chief of the Dien Bien Phu Street branch in Ho Chi Minh City.

She was arrested in October 2011 for allegedly cheating many people, banks, and businesses out of more than VND4 trillion.

The four men are suspected of involvement in the embezzlement, though details are sketchy.

Sixteen others have also been taken into custody on suspicion of helping Nhu with the scheme.

The ministry inspectors said the transfer was initiated by Nguyen Duc Kien, an ACB co-founder, who was arrested on August 20 on charges of illegal business activities at his three companies, fraud, and "deliberately violating state regulations resulting in serious consequences." 

Hai, who resigned after Kien's arrest, was taken into custody on August 23.

Asked if the 29 banks that received the money from ACB would be punished, Vu Duc Dam, chief of the Government Office, said Thursday that only those who violated regulations would be penalized.

Since the investigation has been launched after they resigned, the bank's operation would be"unaffected," he said.

"The government and related agencies have anticipated possible occurrences and introduced stringent measures to maintain stability in the banking system," he said.

"The legal interests of people depositing money at banks will be guaranteed; there is no need to worry."

Since investigations are still in progress, more information cannot be revealed, he said.

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"Since banking is a sensitive field, law enforcement agencies will strictly punish violations, and the government has ordered related agencies to closely cooperate to protect the banking system from collapse."

The government has also ordered police and the State Bank of Vietnam to take all necessary measures to deal with illegal acquisitions of banks -- by buying shares in the market without disclosing the fact -- identified so far, he said.

The crimes will be dealt with thoroughly to "cleanse" the banking system, he stressed.

Meanwhile, the central bank has begun a bank restructuring program, and is now quickly reorganizing banks with poor performances, and Dam added that the SBV aims to finish the task by next year.

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