Former financial mogul may face 4 charges
Former financial mogul may face 4 charges
Nguyen Duc Kien may face another legal proceeding in connection with tax evasion in addition to the three charges that have already been lodged against him.
Appearing as a "boss" in the financial sector, Kien, who owned a fancy villa in Hanoi, expensive cars, and a professional football team, often made strong statements as a real financial mogul.
But in fact, almost all the money Kien had was sourced from bank loans and other kinds of borrowing, according to Cong An Nhan Dan (The People’s Policemen) newspaper.
More than six months after Kien was arrested on charges of "illegal trading", the investigation has also clarified that Kien and seven others were involved in acts of "willful contravention of state economic management, causing serious consequences" and “Cheating to misappropriate other people's assets”.
Kien’s illegal actions caused a negative impact on the currency market, affecting the macroeconomic operating policy of the State.
Old tricks - getting rich on OPM
Kien was once regarded as an influential figure in the local financial sector by holding shares in many banks, but the real story has been slowly unfolding – he just get rich on other people’s money (OPM).
Between 2006 and 2008, founded and ran three companies, including the Dong Da District-based B&B Trade and Investment Joint Stock Co, the Hoan Kiem District-based Asia Financial Investment Co Ltd, and ACB Hanoi Investment Joint Stock Co.
On November 30, 2010, Kien used his legal position at B&B Co to borrow VND1 trillion ($47.7 million) from Asia Commercial Joint Stock Bank (ACB), of which he was a co-founder, through the issuance and sale of bonds to ACB for a period of 120 months.
Once the loan was received, Kien and eight family members used VND974.85 billion to buy a 33% stake in the Vietnam Thuong Tin Joint Stock Commercial Bank (VietBank), bringing their holding in the bank to 41 percent.
On January 10, 2011, Kien used Vietbank’s shares as collateral for the VND1 trillion loan to ACB.
That same day, Kien used his legal status at Asia Financial Investment Co to borrow VND659 billion from ACB, also through the issuance and sale of bonds to ACB.
Once the money was received, it was reinvested in the purchase of ACB shares to raise his stake in the bank to 2 percent.
The collateral for the loans were the shares in Dai A Commercial Joint Stock Bank (Dai A) and Kien Long Commercial Joint Stock Bank (Kien Long Bank).
It is noteworthy that the financial source for the purchase of the shares of Dai A and Kien Long Bank was a previous VND800 billion ACB loan which Kien had borrowed under the legal status of ACB Hanoi Investment Joint Stock Co.
Through these tricks, Kien borrowed more than VND2.4 trillion ($111.4 million) from ACB; and then used the loans to buy shares of other banks, and then use those shares as collateral for the original loan at ACB.
Moreover, with authority as the Deputy Chairman of the ACB co-founder board, from May 2010 to November 2011, Duc Kien directed the Standing Board of Directors of ACB, including Tran Xuan Gia, Le Vu Ky, Trinh Kim Quang, Pham Trung Cang and Ly Xuan Hai, to authorize the bank’s employees to illegally deposit money in other credit institutions.
Specifically, from June to September 2011, ACB authorized 19 bankers to deposit nearly VND719 billion in the Nha Be and Ho Chi Minh City branches of Vietinbank at a 14 percent interest rate. However, the real interest rates it enjoyed from the branches ranged from 17.7 to 27 percent a year.
The difference between the real interest rates and those displayed on the contracts is against the State Bank of Vietnam’s regulation about the deposit interest rate cap.
The entire VND719 billion, however, was swindled by Huynh Thi Huyen Nhu, who has swindled a combined VND4 trillion, or $192 million, from several banks and credit institutions.
Nhu, 33, a former official at Vietinbank, was the subject of an inspection into her swindling that began in August 2011.
Accordingly, Nhu has mobilized some VND200 billion at exorbitant deposit interest rates from many individual investors since 2010 to invest in the realty market, investigators said.
Besides ACB, investigators also found that Nhu had caused huge damages to three other banks -- Maritime Bank, Tien Phong Bank, and Navibank.
Through the same old tricks, Kien used his legal entity in ACB Hanoi Investment Joint Stock Co to borrow VND307 billion from ACB through the issuance of bonds, once again, to purchase approximately 30 million shares of Hoa Phat Steel Joint Stock Co. He then used more than 22 million of these shares to mortgage at ACB to ensure the issuance of bonds.
On May 15, Kien directed his subordinates at a meeting of the Board of Directors to transfer 20 million shares of Hoa Phat Steel Joint Stock Co, worth VND264 billion, to the Hoa Phat Steel Co Ltd. It is worth noting that these 20 million shares were among the more than 22 million shares that were mortgaged at ACB to ensure the issuance of bonds.
Thus, Nguyen Duc Kien and two others, Tran Ngoc Thanh and Nguyen Thi Hai Yen, were charged with "phishing seized property", bringing the mortgaged property to sell to appropriate VND264 billion from Hoa Phat Steel Co Ltd.
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