Investigators with the Ministry of Public Security have pressed charges against eight former leaders of the Asia Commercial Bank (ACB), one of Vietnam's major banks, for several wrongdoings.
The Supreme People's Procuracy, Vietnam's highest prosecutors' office, will consider ratifying the charges.
Nguyen Duc Kien, 49, a co-founder of ACB, and five former executives, will face charges of "deliberately violating state regulations resulting in serious consequences."
The former executives are Ly Xuan Hai, former CEO, Tran Xuan Gia, former chairman, and former deputy chairmen Trinh Kim Quang, Le Vu Ky, and Pham Trung Cang.
They are accused of causing losses of over VND1.4 trillion (US$66.26 million).
Investigators have also sought to charge Kien, who was listed as one of Vietnam's 100 richest men in 2010, with fraud, illegal business activities and tax evasion.
Two of his subordinates face charges of fraud as well.
According to the investigators, towards the end of 2009, Kien and the former executives of ACB provided the ACB Securities Company with VND1.5 trillion ($71 million) to buy the bank's stocks that were declining in value then.
The securities company, which is 100 percent owned by the bank, forwarded the money to two companies owned by Kien to buy more than 52.5 million ACB shares.
Investigators said the ACB's former leaders' actions in the purchase violated Vietnamese laws on stock business activities and caused losses of over VND688 billion ($32.6 million) to the bank.
Kien and his accomplices also illegally approved ACB's deposit of nearly VND719 billion ($34 million) at Vietinbank's Ho Chi Minh City branch between June and November 2011.
The deposit earned an interest rate of 14 percent plus an additional 3.7-13 percent, the investigators said, without elaborating on how the extra earnings accrued.
In Vietnam, banks are prohibited by law from depositing money in other banks to earn interest, and the central bank at that time had set a cap for interest rates at 14 percent.
ACB's deposit at Vietinbank was later stolen by Huynh Thi Huyen Nhu, a former deputy chief of the risk management office at Vietinbank's HCMC branch.
Nhu, now in police custody, and 16 others are facing charges of fraud for cheating local banks and companies out of nearly VND4 trillion ($189.3 million).
More information on how such a big deposit was pocketed has not been made available. The status quo regarding the deposit is also not clear.
Investigators said that in May 2010, Kien ordered Tran Ngoc Thanh, then director of the ACB Hanoi Investment Joint-stock Company (ACBI), to mortgage with ACB over 22 million stocks of the Hoa Phat Steel Joint-stock Company that it had bought earlier for securing the issuance of ACBI's bonds.
About two years later, although the stocks were still mortgaged at the bank, Kien ordered ACBI chief account Nguyen Thi Hai Yen to fake documents to sell 20 million of them to Hoa Phat Steel Co. Ltd. for VND264 billion ($12.5 million).
Both companies are members of the Hoa Phat Corporation.
ACBI is among five companies that Kien founded and were involved in financial business activities without licenses, Tuoi Tre (Youth) newspaper quoted investigators as saying.
Investigators said the companies, under Kien's order, issued bonds and sold them to local banks, and then used the money to buy stocks of other banks and invest in other companies.
They said using earnings from the sale of bonds in the manner that the companies did was against the law.
Moreover, the activities actually belonged to financial business for which Kien's companies were not licensed.
Tuoi Tre said between March 2008 and November 2010, Kien's companies spent some VND5.6 trillion ($265 million) from their registered capital and bonds issued to ACB, Vietinbank and Southern Bank buying stocks of Techcombank, Vietinbank, Dai A Bank, Kien Long Bank, Eximbank, and Hoa Phat A Chau Real Estate Joint-stock Company.
Another VND3.7 trillion ($175.1 million) was used to buy shares of other companies and increase funds at companies related to Kien, it reported.
According to investigators, Kien also founded Thien Nam Production and Export-Import Company, which engaged in gold trade between November 2009 and July 2010 without licenses.
Another one of Kien's companies, B&B Trade and Investment Joint-stock Company, has been accused of evading VND25 billion ($1.2 million) in taxes.
Investigators said in December 2008, Kien's younger sister Nguyen Thuy Huong asked B&B to trade in 600,000 taels ( 720,000 ounces) of gold on her behalf (worth around $1 billion at today's prices).
Under their contract, B&B earn one percent of profit earned from the trade, along with other fees.
Tuoi Tre quoted investigators as saying that Huong also agreed that the company could entrust part or all of the trade to ACB.
Later, they earned more than VND100 billion ($4.7 million) in profit, and B&B, under Kien's orders, transferred all the profit, including the company's share, to Huong, to turn it from business income into personal income.
With Vietnam granting a personal income tax break in the first half of 2009, B&B evaded VND25 billion in taxes, investigators 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.
Last month global rating agency Fitch 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 Kien's six companies.
Losses may also arise from ACB's deposit placements at Vietinbank (another six percent of core equity), it said.
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