Vietnam bank chief seized as scandal escalates

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Ly Xuan Hai, who resigned as CEO of Asia Commercial Bank Thursday, has been arrested for allegedly violating economic regulations, Vietnam News Agency reported.

Hai, 47, who will be in custody for four months, saw his resignation accepted by the ACB board earlier that day. He had served as the bank's chief executive since 2005.

Tuoi Tre Friday quoted ACB deputy general director Nguyen Thanh Toai as saying Thursday that Do Minh Toan, another deputy general director, replaces Hai.

The arrest of Hai, who is being investigated for "violating state regulations on economic management, resulting in serious consequences," came three days after 48-year-old Nguyen Duc Kien, one of ACB's founders, was taken in for alleged "illegal business activities" at three companies where he served as chairman.

Details of their alleged wrongdoing are, however, not known.

Since Kien's arrest Monday night, ACB shares, indeed the entire stock market, have taken a beating.

Depositors rushed to the bank to withdraw money. A total of VND8 trillion (US$384 million) was withdrawn on Tuesday and Wednesday, news website Dat Viet quoted Toai as saying.

But Toan, the new CEO, said that by Thursday the number of customers coming to withdraw money had decreased "significantly" and many even returned to deposit their money again.

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ACB had enough cash a total of $744 million -- to fully meet demand, VnExpress quoted Toan as saying. The State Bank of Vietnam promised to provide it with another VND2 trillion ($96 million), he said.

Tuoi Tre quoted Nguyen Van Dung, deputy director of the central bank's HCMC office, as saying the SBV is keeping a close eye on the situation and would provide ACB cash if required.

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