Three bank officials arrested for violations

DA NANG — The Da Nang police arrested three officials of the Southeast Asian joint-stock commercial Bank (SEA Bank) for banking and loan service violations in the city starting in 2007.

The city’s public security department said Thai Tran Thong, former director of the Da Nang-based branch, Hoang Trung Hieu and Nguyen An, will all be in custody for four months, pending further investigation.

According to police, the three bank officials agreed to a loan contract of VNĐ120 billion (US$5.3 million) for Gia Bao company in 2007, with property and stocks pledged as collateral.

After one year, Gia Bao company could not pay their loan debt and the accumulated interest of over VND100 billion; so the bank decided to check the value of the company’s stocks and property in late 2008.

The total estimated value of the company’s stock was only VNĐ14.5 billion, far below the company’s registered valuation of VNĐ184 billion in the loan contract.

The company eventually only paid VNĐ45 billion of its total debt to the bank; but the bank could not reclaim the remaining VNĐ55.2 billion debt due to the low value of the company’s stock.

The police said the three officials acted illegally when they failed to assign an independent entity to manage Gia Bao’s stock. Police said the illegal actions of the three bank officials violated item 3, clause 179, which governs lending regulations under Viet Nam’s Criminal Law code.

The police also said bank officials intentionally allowed the company to overstate the value of its stocks and assets to qualify for the bank loan.

The case is under investigation. — VNS