Bank officials nabbed for loan violations causing $2 mil in losses

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Police in Ho Chi Minh City Friday (December 24) arrested two officials of Agribank on suspicion of violating loan regulations that inflicted losses of VND40 billion (US$2 million) on the bank.

 

Huynh Trung Hieu, a staff of Agribank's branch in District 3, in April, 2009 prepared documents to grant a loan of VND39 billion to Xuan Lan Services Company, which, in fact, was not engaged in business activities.

 

Police said Hieu was acting on the order of Nguyen Huu Long, deputy director of the branch.

 

While knowing that documents weren't legal, Dao Phuong The, chief of the branch's planning and sales department, approved them, police said.

 

The company was supposed to repay the loan in May, but as it couldn't, its representative contacted Long to make documents for the Trong Bang Trade and Services Company, also without business activities, to take a loan of VND40 billion.

 

The new loan was aimed to pay up the previous one, according to police.

 

Hieu was again ordered to make the documents and assess Trong Bang's creditworthiness without collateral and a repayment plan.

 

The and Hieu have been placed under investigation, police said.

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