Crackdown on cash crime

December 07, 2018 | 16:02
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Vietnam is continuing its overhaul of the banking ­system by getting tough on serious financial crimes.
crackdown on cash crime
Crackdown on cash crime, Source: BIDV

As the country vows to clean up its banking industry, several high-ranking bankers have been prosecuted. In the latest case, Tran Bac Ha, former chairman of the state-owned Bank for Investment and Development of Vietnam (BIDV), was taken into custody by Vietnam’s Ministry of Public Security last Thursday, due to alleged violations of banking operations.

Along with Ha, three of his juniors at BIDV were also arrested: Tran Luc Lang, former senior executive vice president; Kieu Dinh Hoa, former head of BIDV Ha Tinh branch; and Le Thi Van Anh, former head of BIDV Ha Tinh branch’s corporate division.

Beginning working at the Binh Dinh branch of BIDV in 1981, Ha was appointed CEO in 2003 and subsequently became chairman in 2008. In 2016, Ha reached retirement age and resigned as chairman.

However, in 2013, rumours began to circulate on Vietnam’s stock market that he was arrested for helping out the ill-fated Southern Bank, which he vehemently denied as “groundless and foolish”. Although this rumour eventually died down, in 2014 Ha was once again embroiled in a fresh scandal regarding his involvement in the Pham Cong Danh saga.

Danh, former chairman of Vietnam Construction Bank and a prosecuted criminal, admitted that he took ah the assistance of BIDV’s board and then-chairman Ha. Rather than asking Danh for collateral, BIDV used its own assets to secure this massive loan, which was later used by Danh to set up bogus companies and commit other fraudulent activities.

The State Bank of Vietnam estimated that at least VND2.5 trillion ($108.7 million) was embezzled due to Danh’s wrongdoings. Rumours of Ha’s arrest re-emerged in 2017, before he was finally expelled from the Communist Party of Vietnam this June.

Following Ha’s arrest last week, BIDV issued a statement assuring clients and customers that everything is business as usual. “The issues related to the violations, which occurred some years ago of the above-mentioned individuals, have been proactively reported by BIDV to competent authorities. BIDV will continue to coordinate with the competent authorities to handle the case inaccordance with law.”

The bank added that as the largest commercial bank in Vietnam, it will always maintain continuity and stability for businesses, regardless of Ha’s case. The arrest of Ha, and other former BIDV executives, is another milestone in Vietnam’s fight against financial wrongdoings.

Tram Be, former Southern Bank chairman, was a high-profile accomplice of Danh’s who was arrested in 2017. Be was accused of buying out Sacombank in order to transfer bad debts to the financial institution from Southern Bank.

Similar to Ha, Be also lent Danh VND1.8 trillion ($78.26 million) of Sacombank’s money. After Be’s imprisonment, Sacombank was able to recover the entirety of the loan.

As well as Pham Cong Danh’s associates, other bankers have also been prosecuted for subpar lending practices. Tran Phuong Binh, deputy CEO of Dong A Bank, for example, was able to withdrawn VND1.16 trillion ($50.4 million) from the bank for personal use. In this case, personal use included giving loans to the convicted businessman Phan Van Anh Vu. At least 26 people have so far stood trial for this case, including Binh, Vu, other Dong A Bank employees and senior leaders from Ho Chi Minh City and Danang.

By Phuong Nguyen

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