Pham Thanh Tam (second from right) at an Agribank product launch ceremony
Minister of Public Security General Tran Dai Quang told a National Assembly meeting on January 23 held to discuss the implementation of the amended Anti-Corruption Law that due to Tan’s incompetence, he had turned Agribank into one of the worst banks in the country.
As of last June, Agribank had the highest level of bad debts among state-owned commercial banks, with the rate standing at 6.14%. Tan’s weak management during the period was blamed.
Tan was specifically involved in a case that caused a loss of VND3.9 trillion (USD186.9 million) to Agribank’s Southern Hanoi Branch.
The investigative agency previously arrested and prosecuted Pham Thi Bich Luong, 44, who was former director of the bank's branch for “violating regulations on lending at financial institutions”. Luong was found to have acted illegally in giving the go ahead for a loan to a Lifepro Vietnam Joint Venture investment project.
In 2007, Lifepro Vietnam kicked off its Luxfashion project to build a USD197 million garment factory in Ninh Binh Province’s Gian Khau Industrial Park.
Agribank’s Southern Hanoi Branch agreed to lend the project thousands of billions of VND and capital disbursements in both VND and USD worth VND3 trillion (USD143.7 million).
The project halted operations in August 2012 and its foreign director fled the country.
In order to recover the debts, the bank’s branch sent an official document to require the company not to conduct any procedures to facilitate any share trading, changes in shareholders or any other changes before receiving approval from the bank as all of its assets were used as collateral for the loan.
The company was also urged to work out measures to settle their debts, but failed to comply.
The investigative agency suspected that the bank branch had granted the loan without sufficient appraisal of the risks.
Pham Thanh Tan was blamed for his lack of responsibility in monitoring and supervising the implementation of the loan.
Before Tan’s arrest, several high-ranking Agribank officials had been arrested and prosecuted for misuse of power and appropriating assets, including Nguyen Tuan Anh, former Deputy Director of the Agribank branch in Ha Dong; Do Duc Hung, former Director of Agribank’s Hong Ha branch; Ho Dang Trung, former Director of Agribank’s branch No. 6 in HCM City; and Nguyen Thi Hoang Oanh, former Director of Agribank’s Ben Thanh branch in HCM City.
Nearly ten leading Agribank officials were faced criminal prosecution in 2012 alone.
The investigative agency claimed this series of incidents underlined Tan’s incompetent management.
An unnamed official at the State Bank of Vietnam (SBV) said Tan’s arrest would probably not affect Agribank’s current operations has he left his post at Agribank in July 2011.
The SBV had appointed Trinh Ngoc Khanh, former Agribank Deputy General Director to act as the bank’s CEO since November 2012, the official added.