Top executives at Vietnam bank resign

Posted on September 20, 2012

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ACB’s former chairman Tran Xuan Gia

HANOI, VIETNAM — Three executives at a large Vietnamese bank have resigned amid a deepening probe into a scandal that has shaken investor confidence in the country.

Asia Commercial Bank said late Wednesday it had approved the resignation of chairman Tran Xuan Gia and two deputies.

Tuoi Tre newspaper reported a fourth executive currently at Eximbank had also stepped down because he was at ACB when the scandal occurred.

Vietnam’ crowded banking sector is believed to have bad debts of up to 10 percent of outstanding loans and is one of the greatest risks to a once booming economy that is now slowing. The Communist government has pledged to restructure the sector, but doubts remain whether it has the will to do this

Last month, ACB’s ex-CEO Ly Xuan Hai and Nguyen Duc Kien, a superwealthy founder of the bank, were arrested for “improper lending”, causing a run on the bank and a large drop in the country’s stock market. The arrests triggered speculation of a damaging power struggle with the country’s normally secretive political and economic elite.

ACB said the executives had resigned for approving a decision by Hai to allow staff to withdraw $34 million to deposit in another bank. It gave no more details.

The bank said they have appointed a new chairman and two deputies including a representative of Standard Chartered Bank which owns 15 percent of ACB’s shares.

The changes are aimed at “consolidating the management strength, enabling ACB to assert its position as a leading joint stock bank in Vietnam,” it said.

It’s unclear whether the executives will face criminal charges.

The country’s main bourse dropped 2 percent by midmorning while ACB shares were down by almost 4 percent.

Bradenton Herald

Vietnam’s bonds declined, pushing the five-year yield to the highest level in two months, as the resignation of three Asia Commercial Bank executives highlighted concern about instability in the nation’s financial industry. The dong was steady.

The board at ACB, Vietnam’s biggest bank that isn’t owned by the government, approved the exits of Chairman Tran Xuan Gia and two vice-chairmen on Sept. 18, the lender said in a statement yesterday.

Police arrested the bank’s co-founder Nguyen Duc Kien on Aug. 20 for allegedly “conducting business illegally” and subsequently detained former Chief Executive Officer Ly Xuan Hai for alleged economic mismanagement.

“Market sentiment is quite cautious now, given those arrests and resignations of bank officials,” said Hoang Thanh Tam, head of the fixed-income department at Vietnam Maritime Commercial Joint-Stock Bank in Hanoi. “Investors will hold off to see how these events impact the financial sector and the economy.”

The five-year yield rose three basis points, or 0.03 percentage point, to 10 percent, the highest level since July 19, according to a daily fixing rate from banks compiled by Bloomberg.

The dong traded at 20,870 per dollar as of 2:40 p.m. in Hanoi, compared with 20,875 yesterday, according to data compiled by Bloomberg. The central bank set its reference rate at 20,828, unchanged since Dec. 26, according to its website. The currency is allowed to trade as much as 1 percent on either side of the fixing.

Bloomberg

MP Questions Staff Arrests

A Vietnamese parliamentarian seeks media help over his staff’s arrests amid a suspected political tussle.

Wikipedia

Dang Thanh Tam speaks at the World Economic Forum on East Asia in Ho Chi Minh City, June 7, 2010.

An influential member of Vietnam’s parliament has questioned the arrest of two of his employees accused of stealing state secrets in a case believed to be connected to infighting amongst the country’s leadership.

National Assembly Deputy Dang Thanh Tam, a businessman with strong ties to Vietnamese President Truong Tan Sang, said there were “abnormalities that needed clarification” in the charges against the Sept. 7 arrests of Nguyen Duy Hung and Nguyen Thi Bich.

Tam sent a letter to official media outlets and to several members of parliament, seeking help to clarify the charges and “bring greater attention” to the case, according to official news website Vietnam Education Online Wednesday.

Observers say the arrests of his staff could be a prelude to possible action against Tam in what they see as political retribution against President Sang by Vietnamese Prime Minister Nguyen Tan Dung.

Reports have indicated that Vietnam’s president and prime minister are increasingly at political odds with one another.

Vietnam Education Online said reporters were unable to contact Tam for further details.

Tam is the brother of Dang Thi Hoang Yen, who also served as a deputy in Vietnam’s National Assembly but was removed from office in May after she was allegedly found to have omitted certain information from her declaration of candidacy for the lawmaking body.

Yen is the chairwoman of several organizations including Tan Tao Group, Tan Duc Investment and Industry Joint-Stock Co., and Tan Tao University.

Just days ago, Tam had accompanied President Sang in a delegation to the Asia-Pacific Economic Cooperation (APEC) summit talks in Russia.

Tam’s staff Hung is head of Saigon Invest Group’s representative office in the capital Hanoi, and Bich is an employee of Tan Tao Investment Industry Joint-Stock Co. Tam is a chairman of Saigon Invest and oversees both entities.

In what is seen as a reflection of the proxy battle between the two Vietnamese leaders, tycoon Nguyen Duc Kien, believed to be aligned with Dung, was arrested last month for economic crimes at Asian Commercial Bank—one of the country’s biggest banks.

The cofounder of the giant lender is being held for “illegal business activities” in connection with three private companies he chaired.

The Vietnamese stock market has tumbled since Kien was put into custody, as investors fear further arrests in the country’s finance industry.

Carl Thayer, a Vietnam scholar at the University of New South Wales in Australia, suggested that some of Vietnam’s political elite may be concerned that the prime minister has amassed too much power “and needs to be pulled back in a peg.”

“The atmosphere for some reason is just right for going after big fish,” he said.

RFA

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