Vietnam's Agribank ex-chairman arrested in alleged $4.4 mil land scam

By Dua Hoa - Thai Son, Thanh Nien News

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Agribank bankers sit at a trial in Ho Chi Minh City on January 6, 2014 for embezzlement. Photo: Le Quang Agribank bankers sit at a trial in Ho Chi Minh City on January 6, 2014 for embezzlement. Photo: Le Quang

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The former board chairman of Agribank has joined the list of high-profile arrests at Vietnam’s largest state-owned bank for his alleged role in its grand losses.
Investigators at the Ministry of Public Security arrested Do Tat Ngoc on Saturday and placed him under investigation for violations state economic management regulations causing serious consequences at its member companies.
Ngoc, 65, was implicated in various violations at Agribank Print, Commerce and Service Company.
According to the investigation, the company’s investment in a five-star hotel in th coastal resort town of Nha Trang is likely to go bust.
The company made several land-use right violations in Hanoi but the details are only available so far on it buying the land-use rights in the outskirts district Me Linh to build a factory.
Vietnam does not technically allow land ownership but grants land-use rights, which confer the same rights as freehold property. 
The central bank in 2008 asked the company to move away from Hanoi downtown.
Pham Ngoc Ngoan, then the director of Agribank print company, chose a more than two hectares area in Quang Minh industrial zone in Me Linh that the International Training and Education Development Investment JSC (INED) was using.
He inked a deal worth VND93 billion (US$4.4 million) with the Hanoi-based INED to take over the use of the land for 49 years.
Ngoan’s investment plan in the factory, including the rent, was approved by Ngoc, the investigators found.

Do Tat Ngoc, former board chairman of Agribank, was arrested on September 20, 2014 pending investigation into his role in various violations that caused grand losses to the bank. Photo: Hoang Ly

But Hanoi authorities then said the piece of land was not valid for transfer.

They said INED’s right-use land had to be renewed annually, so the company was not in the position to transfer or lease the land to the third party. It is allowed to rent out its assets on the ground though.

Investigators said they suspected that Ngoan had gone on with the deal although he was aware of all the regulations, and that Ngoc condoned to Ngoan’s violation.

Investigators said the money paid to INED could not be recovered. Ngoan was arrested last July.

The police also accused Ngoc of irresponsibility regarding the more than VND500 billion ($23.6 million) loss at Agribank Finance Leasing Company II.

They said Ngoc and Nguyen Huu Luong, then a senior member of the bank’s board, had failed to keep tabs on ALC II’s debt to prevent it from growing between 2007 and July 2009.

Investigations found Ngoc had signed decisions allowing Agribank to lend ACL II more than the limit of 10 percent of its asset value.

The limit, regulated by the central bank in January 2007, is applied on loans from banks to companies under their control, and according to it, ALC II is allowed to borrow only VND1,325 billion ($62.54 million) from Agribank.

But, despite its debt of VND2.2 trillion ($103.84 million) by the end of 2006, the company and similar ones under the bank in April 2007 were approved by Ngoc to borrow another VND3.77 trillion ($177.94 million).

A number of ALC II leaders are currently under trial for embezzlement.

A series of Agribank leaders have been arrested or put under criminal investigation since last year.

Pham Thanh Tan, the bank’s former general director, was arrested early last year, and his deputy Kieu Trong Tuyen this January on charges of irresponsibility.

Tan and Tuyen are being probed for allowing lending violations that caused damage worth around VND3.9 trillion ($184 million) at the bank branch in southern Hanoi.

Executives at many of the bank’s branches in Hanoi and Ho Chi Minh City have also been arrested for problematic management that caused millions of dollars losses at each.

 


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