Nguyen Duc Kien, 49, co-founder of Asia Commercial Bank (ACB), one of Vietnam’s largest banks by assets, and once one of Vietnam’s 100 richest persons as well as 2011 “Businessman of the year”, has been charged by investigators of the Ministry of Public Security of a number of wrongdoings related to his banking business, including tax evasion, fraud and illegal business activities, local media reported on August 9.
Kien and 5 other former executives of the bank will face charges of “deliberately violating state regulations resulting in serious consequences,” the ministry said. They are accused of causing losses of over $66.26 million.
According to the investigators, towards the end of 2009, Kien and the others provided the ACB Securities Company, which is 100 percent owned by the bank, $71 million to buy ACB stocks.The securities company forwarded the money to two companies owned by Kien to buy more than 52.5 million of ACB shares.
Investigators said the ACB’s former leaders’ actions violated Vietnamese laws on stock business activities and caused losses of over $32.6 million to the bank after the shares declined in value.
Kien and his accomplices also illegally approved ACB’s deposit of nearly $34 million at Vietinbank’s Ho Chi Minh City branch between June and November 2011. The deposit earned an interest rate of more than 14 per cent. But in Vietnam, banks are prohibited by law from depositing money at other banks to earn interest, and the central bank at that time had set a cap for interest rates at 14 per cent.
ACB’s deposit at Vietinbank was later stolen by Huynh Thi Huyen Nhu, a former deputy chief of the risk management office at Vietinbank’s Ho Chi Minh City branch. He is also in police custody.
According to investigators, Kien also founded Thien Nam Production and Export-Import Company, which engaged in gold trade between November 2009 and July 2010 without licenses. Another one of Kien’s companies, B&B Trade and Investment Joint-stock Company, has been accused of evading $1.2 million in taxes.
In July 2013, rating agency Fitch released its ratings for Vietnamese banks, affirming a “negative” outlook for ACB. It said the “negative” outlook for ACB reflects a further potential burden on its financial profile.