A former CEO of DongA Bank (DAB) and 20 accomplices will be prosecuted for violations in financial management and credit grants that led to a hefty loss for the Vietnamese lender, police said on Tuesday.
The investigation police under the Ministry of Public Security said they have completed the investigation into the VND3,405 billion (US$150 million) loss of DAB caused by ex-CEO Tran Phuong Binh and his accomplices, and transferred the case file to the Supreme People’s Procuracy for prosecution of the defendants involved.
Binh was also deputy chairman of DAB board of directors, and chairman of its credit panel. He was arrested as part of the investigation in November 2016.
Among the 20 other defendants are two former deputy CEO of DAB, Nguyen Thi Ngoc Van and Nguyen Thi Kim Xuyen, and former directors of the bank’s branches and transaction offices.
All now face charges of “deliberately acting against state regulations on economic management that results in serious consequences.”
Thirteen of the 21 defendants of the case are being held in custody.
Binh was leader of a group of shareholders which collectively held a 10.25 percent stake of DAB. Another group, consisting of Binh’s relatives, owned 7.7 percent of the bank.
Investigators have found that Binh had instructed others to manipulate the credit institution’s banking and monetary operations, through making false loan payments and grants, resulting in the VND3,405 billion damages.
Binh’s violation was mainly responsible for sending DAB to incur an accumulated loss of VND31 trillion ($1.37 billion), and a negative equity of more than VND25 trillion ($1.1 billion) in late 2015.
In one instance, Binh helped Nguyen Hong Anh, a former Ho Chi Minh City police officer, to borrow 2,000 taels of gold from DAB in 2005, when lending and savings in gold were still allowed in Vietnam.
The ex-CEO then faked papers to show that Anh had repaid 1,900 taels of his loan, while he did not give the DAB any single gold bar, resulting in a VND53 billion ($2.33 billion) loss for the bank. (1 tael = 37.8 grams)
Anh is among the 20 other defendants of the case.
In another case, Binh asked his employees to prepare papers showing that business tycoon Phan Van Anh Vu had deposited VND200 billion ($8.81 million) to DAB, while he did not do so. Binh then had DAB transfer VND200 billion from the lender’s fund to Vu.
Vu had been on the loose in Singapore in January, before being deported to Hanoi, where he was arrested by Vietnamese police for leaking state secrets.
The State Bank of Vietnam, the country’s central bank, placed DAB under special supervision on Aug. 13, 2015 “for violations in financial management and credit grants” by some executives.