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Banking tycoon Tram Be arrested

Released at: 17:43, 01/08/2017

Banking tycoon Tram Be arrested

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Arrest the latest of former heads of local banks.

by Duy Anh

Banking tycoon Tram Be, the former Chairman of Southern Bank and Vice Chairman of Sacombank, is the latest to join the list of bankers taken into custody for “deliberately violating State regulations on economic management, causing severe consequences” in the case of Vietnam’s “zero-dong bank”, the Vietnam Construction Bank (VNCB).

The Investigation Police Bureau for Economic Management Order Offences (C46) arrested and gave Tram Be a four-month detention on August 1, together with Phan Huy Khang, another former Vice Chairman of Sacombank.

Be allegedly lent Pham Cong Danh, VNCB’s former Chairman, VND1.8 trillion ($79.2 million) to pay off debts to BIDV owed by Danh’s six companies, using VNCB’s deposits at Sacombank as pledged assets for the loan, causing losses to VNCB.

Last September, Danh was sentenced to 30 years in jail while his accomplices received sentences between three years’ probation and 22 years in jail after a two-month trial for causing total losses of over VND9 trillion ($396 million) to VNCB and leading to the State Bank of Vietnam’s decision in 2015 to acquire all equity in the bank for VND0 per share.

Be turned Sacombank into the fifth-largest lender in the local banking sector in 2015 after its voluntary merger with Southern Bank, with the central bank taking over all of Be’s holding at Sacombank post-merger.

He and his son Tram Khai Hoa resigned from their managerial positions at Sacombank in February this year, but he and other parties are responsible or resolving pending issues at Sacombank in accordance with the law, according to a central bank statement.

Born in 1959, Be began his entrepreneurial path by spending more than ten years in the wood industry before switching to real estate with BCCI (the Binh Chanh Investment and Construction Company), then Trieu An Hospital, a stint in the agriculture and seafood sector with the Son Company, and then the Long Toan Port Group.

Fraud has increasingly become a huge problem in Vietnam’s banking industry, with a dramatic rise in the number of cases over recent years. The biggest fraud in Vietnam’s history was in 2013, committed by Huynh Thi Huyen Nhu, the former Deputy Head of Risk Management at the Ho Chi Minh City branch of the State-owned Vietinbank, along with 30 accomplices, all of whom were staff.

In another case, tycoon Nguyen Duc Kien, former Vice Chairman of ACB’s Founding Council, received a sentence of 30 years for four offences, including misappropriating company assets, intentional violations of State economic management regulations causing serious consequences, tax evasion, and illegal trading.

These “mega-cases” caused major losses of assets and negatively affected the reputation of the country’s banking sector. Such cases are made possible by inadequate control of operational and legal risks at banks.

Authorities are still conducting a search of Be and Khang’s residences.

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