State-owned bank executive arrested for mismanagement

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Police with the Ministry of Public Security said Sunday they had arrested the former deputy general director of state-owned Vietnam Bank for Agriculture and Rural Development (Agribank) for alleged economic mismanagement.

Kieu Trong Tuyen was arrested on January 9 for investigations into charges of "lack of responsibility in economic management, causing serious consequences," police said without elaborating.

In July 2011, Tuyen was dismissed from his post but it was not until late November that year that the Central Inspection Commission the agency responsible for investigating corruption and indiscipline within the Party explained the reason for the dismissal.

According to the commission, its inspectors found that the Party unit of Agribank had failed to supervise the work of bank leaders, leading to wrongdoings in credit management and personnel arrangement.

The commission demanded that Agribank clarify the responsibilities of Tuyen and other senior officials at the bank in the wrongdoings.

On January 23, 2013, Ministry of Public Security police arrested Phan Thanh Tan, Agribank's former general director, for his alleged involvement in a VND3.9 trillion (US$185 million) bad debt scandal at a Hanoi branch.

He faces the same charge as Tuyen.

Tuoi Tre (Youth) newspaper reported that Tan was arrested for giving the loan to a loss-making company, Lifepro Vietnam.

Police earlier arrested Pham Thi Bich Luong, 44, then director of the South Hanoi branch that gave the loan in 2007, for "lending violations."

Lifepro, a foreign joint venture, closed down in October 2012.

The loan was given to set up a garment factory in nearby Ninh Binh Province. The plant operated for a few months before closing in August 2012, and its foreign director fled the country.

Not a dong of the principal or interest has been paid.

Investigations found that the branch had failed to assess the project properly, leading to the loss of money.

Tan, who was deputy general director of Agribank from early 2008 before becoming general director in June 2009, was derelict in his job of assessing the loan, inspectors said.

He was transferred to the State Bank of Vietnam in July 2011.

Last November, the Ho Chi Minh City People's Court sentenced Vu Quoc Hao, the former general director of Agribank Financial Leasing Co. No. 2 (ALCII), to death for embezzlement.

Dang Van Hai, the former chairman of a construction company, was also sentenced to death in the case.

Hao, 58, was charged with embezzling almost VND532 billion ($25.2 million) in state property.

Eleven defendants, including Hao and Hai, were charged with embezzlement, mismanagement, abuse of power and fraud, according to the court's website statement.

The other defendants received prison sentences ranging from three years to 14 years. Prosecutors said Hao and Hai created 10 fake financial leasing contracts to disperse almost VND800 billion.

Vietnamese banks have the highest levels of non-performing loans among six Southeast Asian countries covered by Fitch Ratings.

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