The benchmark VN Index plunged 4.24% today as bank shares continued to slide, raising losses at the bourse to nearly 10% since news of Nguyen Duc Kien’s detention for “illegal business activities” broke three days ago.
Multi-millionaire Kien, 48, a shareholder in some of Vietnam’s largest financial institutions and a founder of Asia Commercial Bank (ACB), was taken into custody late Monday after police raided his Hanoi home.
ACB’s stocks have tanked nearly 20% since Kien’s arrest as jittery customers line up to withdraw deposits, forcing the central bank to pump cash into the institution, state media reported.
More than US$240 million was withdrawn from the bank on Tuesday, the Tuoi Tre newspaper said, while the price of gold has surged as savers scramble for a safe haven.
At ACB branches in Hanoi today, customers queued to withdraw their savings forcing the central bank to send truckloads of cash to ensure liquidity, an AFP reporter said.
“Thanks to advance preparation we still ensured good repayment,” ACB deputy CEO Do Minh Toan told Tuoi Tre.
The central bank pumped more than US$600 million into the banking system yesterday – 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”.
ACB has denied reports that the bank’s general director Ly Xuan Hai has also been arrested, but confirmed that Toan was “temporarily” in charge while Hai assisted police with the investigation into Kien.
The central bank has said Kien’s arrest is not related to the ACB – where he holds a less than 5% stake – but concerned accusations of wrongdoing at three smaller financial companies where he is chairman.
Kien is said to hold shares in ACB – which counts global banking giant Standard Chartered as one of its “strategic partners” – as well as Sacombank, Eximbank, VietBank and others.
He was reportedly involved in drafting the country’s new bank reforms.