From
WIRE REPORTS
A
second top executive in Viet Nam has been arrested in a case that has led to a
plunge in bank shares and a run on deposits, according to media reports.
Ly
Xuan Hai, former chief of the Asia Commercial Bank, was arrested on Thursday
for breaching “state regulations on economic management,” said the Vietnam News
Agency. He had resigned after bank co-founder Nguyen Duc Kien was arrested on
Monday.
Viet
Nam has been pumping money into the bank to reassure depositors.
Kien,
a well-known entrepreneur with close government links and one of the country’s
richest businessmen, co-founded ACB in the 1990s. He was arrested in Ha Noi on
suspicion of “economic violations.”
His
arrest triggered a slide in ACB shares. It also caused a drop in the country’s
stock exchange up until Thursday.
Panicked
depositors have been withdrawing millions of dollars from the bank.
ACB
said on Tuesday that Kien was not involved in the day-to-day operations of the
bank and the arrest would not impact its business.
Hai
has been accused of “intentional wrongdoings that violated state regulations on
economic management, causing serious consequences,” according to a news agency.
No other details were provided.
Hai’s
arrest did not come as a surprise, as state-run media already had reported on
it in the last few days before taking these reports offline, says Nga Pham of
the BBC’s Vietnamese service.
This
unusual practice shows that the government is keen to prevent further panic
spreading through the banking system, she said.
While
government institutions are saying that deposit withdrawals remain within safe
margins, the public are asking for more transparency as worries over the
economy increase, she adds.
Hai,
47, who has doctorates in mathematics and physics, joined the bank in 1996,
reports say.
The
bank run has put pressure on the Vietnamese dong and led to an increase in the
price of gold, traditionally seen as a safe-haven investment at times of
economic instability.
ACB
also faced a run on its deposits in 2003 after rumors, which later proved
false, spread about the arrest of one of its executives at the time.
