Nguyen Duc Kien was arrested on August 20, 2012 on charges of fraud in connection with three companies he owned. He is alleged to have taken billions of VND.
Nguyen Duc Kien was arrested on August 20, 2012 on charges of fraud in connection with three companies he owned
The incident has caused distrust in the Vietnamese market among foreign investors, according to Dr. Edmund Malesky, of Duke University, who mentioned the case's impacts at a recent conference to announce the Provincial Competitive Index (PCI) on March 14.He added that in recent years ACB has been considered a key player in foreign investment.
Controlling stakes in ACB are held by Standard & Chartered, with 15%, Jardine & Matheson, with 7% and Dragon Capital accounting for 6.7%.
At the time of the arrest ACB was the largest non-state bank in Vietnam registered in the stock exchange, and had total assets of VND256 trillion and VND22.6 trillion in capital.
The Vietnamese stock market plunged immediately after Kien's arrest, with the VN-Index losing 4.7%, dropping to 416.84 points within one day. In the course of the next two days the market saw a 10% drop.
Such a significant drop sounded alarms among players in the investment and banking sectors.
In the 30 days following Kien's arrest the PCI survey showed a significant reduction investment plans by foreign companies in Vietnam.
According to the survey, the confidence index for foreign-invested companies fell by 22% during 30 days after the arrest.
Nguyen Duc Kien was arrested on allegations of misconduct while serving as chairman of three separate companies.