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Investigation opened into local banks following ACB fraud scandal fallout

Update: September, 03/2013 - 10:50
Former Chairman of ACB Nguyen Duc Kien. Photo nld.com.vn

HA NOI (VNS)— The Ministry of Public Security has named 26 banks which are being investigated for receiving deposit money from the Asian Commercial Joint Stock Bank (ACB) at interest rates higher than the ceiling level.

Among the banks under scrutiny are Viet Nam Joint Stock Commercial Bank for Industry and Trade (VietinBank), Bank for Investment and Development of Viet Nam JSC (BIDV) and Viet Nam Bank for Agriculture and Rural Development (Agribank).

The banks allegedly violated State Bank of Viet Nam (SBV) regulations when borrowing from ACB at an interest rate higher than 14 per cent.

During the 2005-11 period, ACB mobilised money from senders with high interest rates but faced difficulties in finding borrowers. To prevent the damage, ACB chairman Nguyen Duc Kien and the bank's management board asked employees to send money in Vietnamese dong and US dollars to credit institutions, causing a chain of negative consequences and ignoring the Government's currency policy.

ACB sent a total amount of VND37 trillion (US$1.7 billion) with an interest rate of 11.2-27 per cent per year and $71.2 million with an interest rate of 3-6 per cent to 26 banks. Thanks to this, the bank received VND1.586 trillion ($75.1 million) and $1.2 million in interest, respectively.

On August 7 last year, Kien and seven others were sued on four charges: illegal business, asset fraud and appropriation, tax evasion and violating the State's regulations on economic management. — VNS


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