Monday’s arrest of one of Vietnam’s top tycoons has panicked depositors into rushing to the Asia Commercial Bank (ACB) to withdraw trillions of dong in deposits.
Nguyen Duc Kien, who had founded ACB, was arrested in Hanoi on suspicion of “economic violations”. The arrest also led to a slide in the price of ACB shares though Nguyen owns under 5% of the bank’s stock and is not involved in its day-to-day management.
Depositors withdrew about 5 trillion dong ($240 mil.) from ACB on Wednesday, according to Do Minh Toan, deputy to the bank’s CEO.
Vietnam’s central bank injected 17 trillion dong ($830 mil.) into ACB since Wednesday to keep the panic from spreading and causing further pressure on the dong. It takes 20,000 dong to buy $0.96 at current exchange rates.
Nguyen was arrested on charges stemming from his ownership of other investment companies, according to authorities. The anxiety of ACB depositors is also sparked by the recent disappearance of ACB’s CEO Ly Xuan Hai. Some suspect Ly may also be under arrest or have resigned under pressure.
Nguyen’s arrest has prompted speculation of a possible power struggle within the ruling communist party. Nguyen is closely linked to Prime Minister Nguyen Tan Dung.
Nguyen co-founded ACB in 1994. His family is Vietnam’s fifth richest. He is also considered well-connected politically. He is also a shareholder Kien Long Commercial Joint Stock Bank and the Vietnam Export-Import Commercial Joint Stock Bank, among others.
Nguyen was born in 1964 on the outskirts of Hanoi. In 1981 he left to study at a military school in Hungary which at the time was a communist state. Nguyen worked for a state-run textiles firm before co-founding ACB bank with partners.
He is well known for his ownership and control of Vietnam’s professional soccer league.
ACB had suffered a run on its deposits in 2003 after rumors surfaced about the arrest of one of its executives at the time. The rumors were later proven to be false.