Vietnam jails bank director in finance probe

Domestic stock market slides $4bn after head of one of nation's largest banks arrested for violating state regulations.

    Vietnam jails bank director in finance probe
    Asia Commercial Bank said nervous investors were withdrawing money from the bank after arrests [AFP]

    Police in Vietnam have arrested the head of one of the country's largest banks as part of a widening probe into financial crimes that has spooked investors and depositors, the country's state news agency has reported.

    Asia Commercial Bank (ACB) chief Ly Xuan Hai was arrested late on Thursday night for violating state regulations and "causing grave consequences", the Vietnam News Agency reported on Friday.

    The arrest of Hai came just hours after the ACB announced he had resigned from the position of director general, local Thanh Nien news agency reported.

    ACB said it had halted lending as a result of the troubles at the bank, but that it was operating normally.

    On Thursday, the bank said that nervous customers were withdrawing money from the institution.

    This follows the arrest of the bank's co-founder, Nguyen Duc Kien, on allegations of "illegal trading", on Monday.

    The central bank said then that the arrest Kien, who holds a less than five per cent stake in ACB, was not related to activities at the bank.

    Stocks slide

    Vietnam's stock markets have lost nearly $4bn in value after the two top bankers were arrested.

    The combined market capitalisation of the Hanoi and Ho Chi Minh City exchanges had dropped by $3.85bn by Thursday, local Tuoi Tre newspaper reported, prompting the Securities Commission to call for calm.

    Hai's arrest deepened the problems facing ACB, which has seen its share price dive nearly 20 per cent and had jittery depositors withdraw at least $384m since its founder was arrested on Monday.

    The $384m in withdrawals by depositors was recorded over Tuesday and Wednesday, the ACB's new director general Do Minh Toan said according to state media reports.

    The central bank pumped more than $600m into the banking system on Wednesday to double the sum of Tuesday's intervention, according to official data.

    ACB branches in Hanoi visited on Friday appeared normal, with no signs of panicked investors withdrawing deposits, AFP news agency reported.

    SOURCE: Agencies


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