Finance mogul prosecuted for major charges

 
Nguyen Duc Kien and some arrestees in the case

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The Ministry of Public Security has completed their year-long investigation into the violations by Kien, who was the founder of Asia Commercial Joint Stock Bank (ACB). Three major real estate assets owned by Kien and his wife have been seized.

The charges against Kien are as follows: Illegal business, extortion, asset appropriation, tax evasion and intentional breach of state regulations on economic management. These alleged crimes have had serious repercussions in Hanoi and HCM City.

The case has stirred up public concern over the past year due to its major size and the seriousness of the violations that involved  several bank leaders.

The investigative agency has uncovered tricks used by Kien in order to influence several top leaders at ACB, even though he was no longer a member of the bank’s Board of Directors when he was arrested last August.

In 1993, Nguyen Duc Kien was a major shareholder at ACB. He then quickly gained power at the bank and  continued to act as vice-chairman of the bank’s Board of Directors between 1994 and 2008. During this time, he also took several important posts at the bank and had great influence on the bank’s day-to-day business operations.

Being a banking and finance expert and having acquired knowledge of various techniques that allowed him to take advantage of loopholes in the current regulations, he’s fully aware of restrictions on cross-ownership at several banks at the same time, while continuing to be a member of the board. So he voluntarily withdrew from the bank’s board of directors and set up five companies which were led by several members of his family.

In order to maintain his influence at ACB, he set up and acted as vice-chairman of a council of founders at the bank before he left; even though such a council is illegal for a bank in Vietnam.

He took advantage of loopholes in regulations on corporate bond issuances, gold trading and interest rates, to commit several misconducts that allowed him to hold control over the securities market and own stakes in different banks at the same time.

In order to drive up the price of ACB stock, Kien collaborated with some of the leaders at ACB to allocate VND1.5 trillion to ACB Securities Company (ACBS), the bank’s wholly owned subsidiary firm, under the form of the firm’s equity, to buy ACB shares.

ACBS gave VND1.557 trillion to ACI Company to help buy over 52.5 million ACB shares. To date they have retrieved only around VND364 billion. The misconduct caused a total  loss of over VND614 billion to ACB.

Being Chairman of the Board of Directors at ACB Investment (ACBI), Kien requested Tran Ngoc Thanh, the firm’s director, to sign a contract to use 22.497 million shares of Hoa Phat Steel JSC as guarantee at ACB for the firm’s issuance of bonds worth VND800 billion at the bank. They did this without getting any agreement from ACB and ACBS or any notice to Hoa Phat Group either.

Kien requested that Thanh and ACBI’s chief accountant, Nguyen Thi Hai Yen, falsify documents to prove that ACBI had made an official decision to sell its stake in Hoa Phat Steel JSC to Hoa Phat Steel One-member Limited Company, in order to swindle VND264 billion from its partner.

Regardless of the State Bank of Vietnam’s regulations, Kien, acting as chairman of ACB’s Council of Investment, mandated ACB staff to deposit money at different financial institutions and allocate money to ACB Securities One-Member Limited Company to buy ACB shares. By doing this, they illegally brought around profits worth VND256 billion to a group of ACB shareholders, but caused direct losses of over VND1.4 trillion to the bank.

Kien was also found to have evaded taxes worth over VND25 billion in a deal between B & B Company and ACB where he earned more than VND100 billion.

Apart from Kien, seven of his accomplices will also be prosecuted in the case.