A co-founder of Asia Commercial Bank (ACB) arrested last year will be investigated for allegedly evading nearly VND25 billion ($1.17 million) in taxes, the Ministry of Public Security said.
Tax evasion is the latest charge that the ministry's investigators are seeking against Nguyen Duc Kien, 49, who already faces charges of fraud, "deliberately violating state regulations resulting in serious consequences" and conducting illegal business activities.
According to initial information, in December 2008, B&B Trade and Investment Joint Stock Company, where Kien served as a board chairman, signed a contract with ACB authorizing the bank to conduct its gold business outside Vietnam.
The company earned more than VND68.8 billion ($3.22 million) from the gold business it entrusted the bank with between December 25, 2008 and June 24, 2009.
But, B&B declared with related agencies that it earned over VND688 million ($32,000), or around one percent of the real profit, and paid income taxes accordingly, the inspectors said.
The rest of the profit was transferred to a third party that signed a contract authorizing B&B to handle his or her gold business both inside and outside Vietnam.
According to the inspectors, the transfer turned the profit from corporate income to personal income. Thus, it was exempted from taxes, because Vietnam had granted a personal income tax break in the first half of 2009.
They said the authorization contract signed between B&B and that person was illegal, because the company was not licensed to conduct gold businesses outside Vietnam.
Tuoi Tre reported on Saturday that the third party was Kien's younger sister, Nguyen Thuy Huong.
Kien was arrested on August 20 last year following allegations of illegal business activities at three companies where he served as a board chairman - B&B, ACB Hanoi Investment Joint Stock Company and Asia Hanoi Financial Investment Ltd., Co.
The ministry inspectors later announced that they were seeking two more charges against Kien: fraud, and "deliberately violating state regulations resulting in serious consequences."
They also arrested Tran Ngoc Thanh, director of ACB Hanoi Investment Joint Stock Company, and Nguyen Thi Hai Yen, the company's chief accountant, as suspected accomplices.
In the meantime, six other former executives of ACB were taken into custody on suspicion that they had collaborated with Kien in approving the bank's deposit of nearly VND719 billion ($34.4 million) at Vietinbank between June and September 2011.
They were also accused of ordering their employees to deposit another VND1.1 trillion at other banks.
In Vietnam, banks are prohibited by law from depositing money at other banks to earn interest.
ACB deposits earned an interest rate of 14 percent plus an additional 3.7-13 percent, raising other legal questions, as the central bank at that time had set a cap for interest rates at 14 percent.
The involved former executives of ACB are Ly Xuan Hai, its former CEO, Tran Xuan Gia, its former chairman, and Trinh Kim Quang, Le Vu Ky, and Pham Trung Cang, all former deputy chairmen.
The deposits at Vietinbank were later misappropriated by Huynh Thi Huyen Nhu, deputy chief of Vietinbank's HCMC risk management office, and others.
She and 16 others are facing charges of cheating local banks and companies out of nearly VND4 trillion ($190.59 million) in 2010-11.
Following the arrests, ACB shares took a dive and customers rushed to withdraw money from the bank.
In response to the chaos, Vietnamese banks, including the State Bank of Vietnam, pledged they would support ACB, and the bank's leaders claimed soon after that they had overcome the crisis.
However, global rating agency Fitch this week released the ratings for Vietnamese banks, affirming a "negative" outlook for ACB.
It said the "negative" outlook for ACB reflects a further potential burden on its financial profile from exposure to the six companies where Kien was either chairman or a board member.
The unreserved amount, equal to 54 percent of the bank's core equity, is reportedly covered by collateral and classified in the special mention category, according to the ratings agency.
Losses may also arise from ACB's deposit placements at Vietinbank (another six percent of core equity), it said.
In its 2012 financial report released in April, ACB, Vietnam's largest private lender by assets, said Kien's six companies owed over VND7.1 trillion ($335.4 million) to the bank.
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