Vietnamese banker Nguyen Duc Kien arrested

Posted on August 21, 2012

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Mr Kien was one of the founders of ACB but withdrew from its board in 2010 and is no longer a “major” shareholder in the bank, whose business would not be affected, said officials. Photo: AFP

Nguyen Duc Kien, 48, founder of one Vietnam’s biggest lenders, the Asia Commercial Bank (ACB), was seized by police for what officers described as conducting “illegal business”.

Stock markets tumbled yesterday (Tuesday) when the high-profile detention was reported in the state media, with the main HNX index closing down by 5.24pc.

The falls reflected nervousness among investors in economically troubled Vietnam where the government tightened credit and vowed to reform the banking sector in its battle to bring down raging inflation.

Mr Kien was one of the founders of ACB but withdrew from its board in 2010 and is no longer a “major” shareholder in the bank, whose business would not be affected, said officials.

Trinh Kim Quang, the vice-chairman of ACB, said in a statement on the bank’s website that Mr Kien’s problems were a “personal” matter that did not impinge on ACB’s operations.

However, Mr Kien is also a shareholder in a number of other Vietnamese banks, as well as being chairman of Hanoi Football Club and a business that runs the country’s popular professional V-League soccer association.

He now enjoys the dubious distinction of being the first of the country’s high-profile tycoons, who have grown rich since the Communist government opened up the economy in the mid-nineties, to be arrested for alleged wrong-doing in connection with three private firms.

Vietnam was once hailed as one of Asia’s tiger economies with a decade of 7pc annual GDP growth before the global crisis of 2008 brought a slowdown. This year analysts expect the economy to grow by 5.1pc.

The government had tried to ride out the 2008 crunch by stimulating the economy, but that led to soaring property prices in 2010 and inflation hit 23pc in August last year.

The government has since tightened credit to get a grip on inflation, down to an annualised rate of 5.3pc in July, and pledged to tackle the country’s banks which are awash with bad debt, corruption and cronyism.

Mr Kien’s arrest re-ignited fears of fresh instability in the already unstable banking sector.

The Telegraph

Why mogul Nguyen Duc Kien gets arrested

Kien’s Bentley with special licence number. (photo: GDVN)

According to the Ministry of Public Security, Nguyen Duc Kien was arrested and prosecuted for committing illegal business.

The arrest of Kien is based on accusations of illegal business at three companies where Kien is the Chairman, including the B&B Investment and Trade JS Company, ACB Hanoi Investment JS Company and Asia Hanoi Investment and Finance Co., Ltd.

Investigators confirmed on August 21 that Kien, former Vice Chairman and Vice Chair of the founding council of the Asia Commercial JS Bank (ACB), did not involve in running the ACB.

Investigators also said that the arrest and prosecution against Kien is normal activities of investigating agencies.

Kien, 48, is the Vice Chairman of the Vietnam Professional Football JS Company (VPF), Chairman of the Hanoi FC and the co-founder of many commercial joint stock banks like the Asia Commercial Bank (ACB), Kien Long Bank, etc.

Kien was born in 1964. He studied at the Zalkamate Military Technology College in Hungary after graduating from the University of Military Technology.

After eight years working in the textile and garment industry, he began investing in the banking sector and became the Vice Chair of ACB, one of the largest commercial joint stock banks in Vietnam, at the age of 30.

Kien was named in the list of the top 100 richest men in the stock market of Vietnam, with around VND805.9 billion (more than $400 million) worth of his shares at ACB. The total value of ACB shares held by Kien’s family was estimated at VND2 trillion by the end of 2010.

According to ACB’s report 2010, Kien was not a member of the bank’s management board but he is considered the major shareholder of many big banks.

Tuyet Nhung – Mai Anh

Nguyen Duc Kien arrested for’ economic violations’

Kien’s house is located in one of Hanoi’s priciest area (US$10,000 – $50,000 per square meter).

Nguyen Duc Kien, one of Vietnam’s richest businessmen, has been arrested for suspected “economic violations”, according to the local media.

Mr Kien is the one of founders of Asia Commercial Joint Stock Bank (ACB), one of Vietnam’s largest banks.

Shares of ACB fell 7% on the Ho Chi Minh Stock Exchange after the news.

However, ACB said that Mr Kien was not involved in the day-to-day operations of the bank and the arrest would not impact the bank’s business.

“It is a personal issue (of Kien),” Nguyen Thanh Toai, deputy general director of ACB, was quoted as saying by Tuoi Tre News.

“Kien is no longer a major shareholder, nor a board member, and is not involved in the bank’s board of executives.

“The detention of Kien is the decision of the authorities so it does not affect the normal operation of the bank,” he added.

Tuoi Tre News reported that authorities also conducted a search at his residence in Hanoi on Monday night and seized several documents .

Mr Kien is also a shareholder in other commercial banks, including Kien Long Commercial Joint Stock Bank and the Vietnam Export-Import Commercial Joint Stock Bank

BBC

Kien’s arrest costs Vietnam’s Central Bank $240 million in liquidity aid

The State Bank of Vietnam – the country’s central bank – on Tuesday injected some VND5 trillion ($240 million) into the banking system for urgent liquidity support following the arrest of banking and football tycoon Nguyen Duc Kien.

The State Bank of Vietnam reassured depositors on the liquidity sufficiency of the banking system, while actively pumping money via the open market operations (OMO) channel.

According to Reuters’ data, the VND5 trillion OMO injections with an interest rate of 8.8 percent a year has been the largest amount of money pumped via OMO since early February, the Lunar New Year holiday, newswire Vneconomy reported.

It is equal to the combined values of all the OMO transactions from June to August 20, 2012.

In July and August alone, OMO channel saw very few successful trading sessions with the highest value reaching some VND1.065 trillion on July 13, 2012.

But OMO channel on Tuesday immediately witnessed active trading after news of Kien’s arrest and SBV’s injection was released.

On the interbank market, overnight rates were quoted at 4.5-4.7 percent a year, while those for one-week and one-month terms were 4.8-5 percent and 6.5-7.5 percent a year respectively, slightly higher than yesterday.

Central bank’s reassurance

SBV said on its official website that Kien is presently not involved in the management and administration of Asia Commercial Joint Stock Bank (ACB) where he served as vice chairman of the board of directors and the board of founders 2-3 years ago.

Therefore, ACB depositors should set their mind at ease, said SBV.

“However, SBV has also planned to closely monitor changes in the monetary market for available liquidity support when necessary to ensure stability and the safety of the system,” SBV said on its website.

The message was reiterated by SBV Governor Nguyen Van Binh at a meeting with the Standing Committee of the lawmaking National Assembly which was broadcast live on Tuesday afternoon.

“I have directed municipal arms of SBV nationwide to draw up necessary support plans to secure the liquidity of ACB and other credit institutions in case there are mass withdrawals,” Binh said at the meeting on bad debt situation and the national banking restructuring progress.

A leader of the Ho Chi Minh City branch of SBV told VnExpress that it had pumped a significant amount of money, which is mainly to support bank liquidity.

“We are ready to offer timely liquidity support, not only for ACB but for any other banks affected by Kien’s arrest.”

“The arrest [Monday evening] has caused a real psychological impact on the financial market, though Kien is not operating any banks now,” he said.

ACB ordered suspension of disbursement

Meanwhile, ACB on early Tuesday morning asked all the branches and transaction offices to suspend the disbursement of all loans pending notice of the executive board for fearing of sudden liquidity stress following the arrest.

It also asked all the heads and their deputies at those places not to leave their offices.

But by late morning, noticing the situation did not turn negative as expected, ACB decided to approve disbursements concerning loans of under VND2 billion. All the loans which are worth over VND2 billion will be reported to ACB headquarters for final approval.

Money pumped out from SBV for liquidity support, and the 4.7 percent and 5.24 percent drops of VN-Index and HNX-Index could be the reason behind the rise of the local gold price to over VND43 million a tael.

However, the price of US dollar at leading commercial banks fell by VND5-15 per dollar day on day to VND20,805-20,860 a dollar for bid and ask respectively.

Tuoi Tre

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Posted in: Corruption