Vietnamese police said Tuesday they were pursuing more serious charges against one of the country’s top banking tycoons, whose arrest last month sent a shock-wave through the nation’s financial markets.
Multi-millionaire Nguyen Duc Kien is now under investigation for “deliberate wrongdoing causing serious consequences” and “fraudulence”, according to a statement from the Ministry of Public Security.
Under the communist country’s criminal code, “fraudulence” carries a maximum sentence of life in prison, while “deliberate wrongdoing” has a 20-year penalty.
Kien is a shareholder in some of Vietnam’s largest financial institutions and was one of the founders of the Asia Commercial Bank (ACB), which counts global banking giant Standard Chartered as one of its “strategic partners”.
The 48-year-old tycoon was detained on Aug 20 for “illegal business activities” — a vague charge which legal experts have said would likely carry a light sentence — with the ex-head of the ACB joining him in custody days later.
Ly Xuan Hai was arrested for “deliberate wrongdoings causing serious consequences” with the two arrests causing ACB’s share price to fall sharply and triggering a minor bank run.
Police on Tuesday also announced the arrests of the director and chief accountant of the ACB Hanoi Investment Joint Stock Company, a small investment company owned by Kien.
Observers warned that the widening scandal could spook already jittery foreign investors, particularly in Vietnam’s fragile banking sector.
Experts have widely interpreted the arrests of the two high-profile bankers as part of bitter infighting within the ruling communist party.
Kien is seen as an ally of Prime Minister Nguyen Tan Dung and has become the subject of intense speculation on blogs over his business dealings with Dung’s daughter.