Ho Chi Minh City police have filed charges against three high ranking officials at an Agribank branch for violating lending regulations and causing losses of VND120 billion (US$6.3 million).
Nguyen Tam, director of the Tan Binh District branch, and his son-in-law Do Giao Toan, deputy head of the credit department, were arrested Friday. The other official, deputy branch director Pham Viet Van, was placed under house arrest Saturday pending further investigation.
The officials are accused of inappropriately signing at least nine credit contracts from 2005 to 2008 with Tran Huynh Nghia, director of Cat Phuong Nam, a VND15 billion company engaged in construction, tourism, animal husbandry and other businesses.
According to investigators, under the contracts, Nghia used his shares in a large company worth VND240 billion as collateral for a combined loan of VND120 billion.
The shares were fake, but Toan failed to have them assessed properly before approving the loan, which has now gone into default.
Nghia was arrested late last month for misappropriating the money.
Police are continuing the investigations into the case that they have termed "very serious".
State-owned Agribank, also known as the Bank for Agriculture and Rural Development of Vietnam, is Vietnam's largest lender by assets.
In another major case, police in February arrested a senior official of state-run Bank for Investment and Development of Vietnam, or BIDV on bribery charges. Doan Tien Dung, deputy chief executive of the bank, was accused of receiving a bribe of VND1 billion from a local company.
The case is also undergoing further investigation.