Skip to main content
Canada’s most-awarded newsroom for a reason
Enjoy unlimited digital access
$1.99
per week
for 24 weeks
Canada’s most-awarded newsroom for a reason
$1.99
per week
for 24 weeks
// //

A security officer carries a bag of money into the vault at Asia Commercial Bank’s Hanoi branch on Thursday, after the arrest of the bank’s director general sparked more panic among depositors.

Hau Dinh/The Associated Press

Vietnam arrested another top banker Thursday, state media said, widening a police probe into the communist country's banking sector that has rattled markets and triggered a run on deposits.

The arrest of Ly Xuan Hai for "deliberate wrongdoing causing serious consequences" came just hours after the Asia Commercial Bank announced he had resigned from the position of director general, Thanh Nien online reported.

Police have raided the French-educated banker's house in southern Ho Chi Minh City and his office, the report said.

Story continues below advertisement

Mr. Hai's arrest deepened the problems facing ACB, which has seen its share price dive nearly 20 per cent and had jittery depositors withdraw more than $200-million (U.S.) of deposits since its flamboyant founder was arrested Monday.

Multi-millionaire Nguyen Duc Kien, 48, a shareholder in some of Vietnam's largest financial institutions and one of the founders of ACB, was detained for "illegal business activities" after police raided his Hanoi home.

The benchmark VN Index plunged 4.2 per cent Thursday led by bank shares, raising losses at the bourse to nearly 10 per cent since the scandal broke and prompting the Securities Commission to call for calm.

More than $240-million was withdrawn from ACB on Tuesday, the Tuoi Tre newspaper said, while the price of gold has surged as savers scramble for a safe haven. News of Mr. Hai's arrest emerged after ACB branches had closed Thursday.

The central bank had previously said Mr. Kien's arrest is not related to the ACB – where he holds a less than 5-per-cent stake – but concerned accusations of wrongdoing at three smaller financial companies where he is chairman.

As well as his stake in ACB – which counts global banking giant Standard Chartered as one of its "strategic partners" – Mr. Kien is said to hold shares in Sacombank, Eximbank, VietBank and others.

He was reportedly involved in drafting the country's new bank reforms.

Story continues below advertisement

But Mr. Hai's arrest brings a new dimension to a scandal that has already sent shock waves through the communist country, said Vietnam expert Carl Thayer, emeritus professor at the University of New South Wales in Australia.

"It's a new ballgame," he said. "Clearly the private sector is coming under scrutiny."

Other experts warned that the growing scandal could spook already jittery foreign investors, particularly in Vietnam's already-fragile banking sector.

Mr. Hai has been replaced by Do Minh Toan, previously ACB deputy chief executive officer, according to VietnamNet.

At ACB branches in Hanoi on Thursday, customers queued to withdraw their savings, forcing the central bank to send truckloads of cash to ensure liquidity, an AFP reporter saw.

"Thanks to advance preparation we still ensured good repayment," ACB's Toan told Tuoi Tre.

Story continues below advertisement

The central bank pumped more than $600-million into the banking system Wednesday – double the sum of Tuesday's intervention – according to official data.

Its governor Nguyen Van Binh has issued rare public assurances that depositors' funds are safe, pledging to "ensure liquidity for ACB and other banks if there is a mass withdrawal."

The communist country's Securities Commission urged the public not to panic and said retail investors should be "calm and prudent" in their securities transactions to avoid losses.

Your Globe

Build your personal news feed

  1. Follow topics and authors relevant to your reading interests.
  2. Check your Following feed daily, and never miss an article. Access your Following feed from your account menu at the top right corner of every page.

Follow topics related to this article:

View more suggestions in Following Read more about following topics and authors
Report an error
Due to technical reasons, we have temporarily removed commenting from our articles. We hope to have this fixed soon. Thank you for your patience. If you are looking to give feedback on our new site, please send it along to feedback@globeandmail.com. If you want to write a letter to the editor, please forward to letters@globeandmail.com.

Welcome to The Globe and Mail’s comment community. This is a space where subscribers can engage with each other and Globe staff. Non-subscribers can read and sort comments but will not be able to engage with them in any way. Click here to subscribe.

If you would like to write a letter to the editor, please forward it to letters@globeandmail.com. Readers can also interact with The Globe on Facebook and Twitter .

Welcome to The Globe and Mail’s comment community. This is a space where subscribers can engage with each other and Globe staff. Non-subscribers can read and sort comments but will not be able to engage with them in any way. Click here to subscribe.

If you would like to write a letter to the editor, please forward it to letters@globeandmail.com. Readers can also interact with The Globe on Facebook and Twitter .

Welcome to The Globe and Mail’s comment community. This is a space where subscribers can engage with each other and Globe staff.

We aim to create a safe and valuable space for discussion and debate. That means:

  • Treat others as you wish to be treated
  • Criticize ideas, not people
  • Stay on topic
  • Avoid the use of toxic and offensive language
  • Flag bad behaviour

If you do not see your comment posted immediately, it is being reviewed by the moderation team and may appear shortly, generally within an hour.

We aim to have all comments reviewed in a timely manner.

Comments that violate our community guidelines will not be posted.

UPDATED: Read our community guidelines here

Discussion loading ...

To view this site properly, enable cookies in your browser. Read our privacy policy to learn more.
How to enable cookies