Stocks tumbled on the benchmark Ho Chi Minh Stock Exchange VN Index and Hanoi’s HNX-Index on news of the arrest of business, football and banking tycoon Nguyen Duc Kien.
Nguyen Duc Kien
The southern bourse closed 15.24 points (3.49%) down, with the northern exchange dropping 3.01 points (4.26%) on Tuesday morning.
All stocks on the newly launched HNX30 almost simultaneously hit their floor price.
Multi-millionaire Kien, the founder of the Asia Commercial Joint Stock Bank (ACB), was taken into custody on August 20 on unannounced charges, sending shockwaves across the country. The police conducted a one-hour search at his home in Hanoi, seizing several documents.
This arrest was confirmed by Phan Van Vinh, Head of the General Police Department of Crime Prevention under the Ministry of Public Security.
The 48-year-old is also Deputy Chairman of the Vietnam Professional Football Joint Stock Co (VPF) and Chairman of Hanoi Football Club.
The Governor of the State Bank of Vietnam Nguyen Van Binh set to quash the jittery mood in a National Assembly Q&A session. He addressed rumours of Mr. Kien’s heavy involvement in Vietnam’s bank sector. He said the SBV had only received a document relating to the arrest of Kien based on the fact he had established three companies which had all operated illegally.
“Mr. Kien is former Chairman of the ACB founding member council which was set up by the banks themselves. However, under the Law on Vietnamese Credit Organisations, commercial joint stock banks are not permitted to have such a council. Currently, Kien is not a member of the board of management and directors, therefore, he is not related to ACB,” the governor added.
The SBV said it has instructed measures to support the liquidity of ACB and other credit organisations in case of massive deposit withdrawal.
According to Vice National Assembly Chairwoman Nguyen Thi Kim Ngan, the SBV had made a mistake to let the ACB as founding member of the council to operate illegally for such a long time.
Following news of Kien’s arrest, many commercials banks, including banks mentioned by NA Deputy Do Van Duong, affirmed that Kien only held a small stake. They also said that Kien was not on their board of directors, nor had he acted as general director.
Speaking with DTiNews this morning (August 21), an ACB representative said, Kien had not been related to ACB management since 2010.
The Investigation Police Agency under the Ministry of Public Security also conducted a one-hour search at his residence in Hanoi on Monday night. The police agency said they had seized several documents related to Kien’s charges.
According to the ranking of assets in the domestic stock market in 2011, Kien ranked 14th with nearly VND760 billion (USD36 million).
