State investigators have arrested an executive of state-owned Agribank in Ho Chi Minh City for approving loans worth more than US$11.6 million to a company without any collateral.
A source from the ministry said they are detaining Vu Ngoc Kinh, deputy director of Agribank Ho Chi Minh City, for investigation into his lending violations.
Police also arrested Vu Duc Son, a clerk of the branch, on the same charge, and Vu Manh Hung, director of the city branch of the Northern Food Company for economic management violations.
The company started borrowing money from the bank’s branch in 2007.
It’s not clear how much has been lent but an investigator said the bank gave the company a loan limit of VND250 billion, without any mortgage required.
Between January and February 2011, Kinh and Son disbursed a VND40 billion (US$1.86 million) loan for the company, which was then already a bad debt customer.
Vietnam Bank for Agriculture & Rural Development, or Agribank, is Vietnam’s largest state-owned bank and has been infamous for huge lapses in management.
Executives at many of the bank’s branches in Hanoi and Ho Chi Minh City have also been arrested in various instances.