VietNamNet Bridge – The arrest of Nguyen Duc Kien, considered a Vietnamese banking tycoon has attracted the attention of the world’s press and shaken the stock market. Observers believe that the information would even stir up the banking system.

Why mogul Nguyen Duc Kien arrested?

Nguyen Duc Kien, the “white-haired big guy,” one of the most influential businessmen in Vietnam, member of the board of directors of a lot of big commercial banks, has been arrested for his illegal business activities in accordance with the Article No. 159 of the Criminal Law.

Kien, 49, had been Deputy chair of the Vietnam Professional Football Joint Stock Company VPF, Chair of the Hanoi Football Club, Deputy Chair and the founding shareholder of the Asia Commercial Bank (ACB), member of the Board of Directors of Eximbank, a shareholder of many other businesses until his arrest on August 20 afternoon.

Stock market vibrating

The information about Kien arrest has immediately dealt a strong blow on the stock market which has been pale for the last two years. Investors on August 21 rushed to bargain shares away, leading to the VN Index of the HCM City Stock Exchange and HNX of the Hanoi Stock Exchange dropping dramatically.

After the morning trading session, the VN Index lost 20.72 points or 4.74 percent to 416.56 points. As such, the stock price rises in the last six consecutive trading sessions have become nonsensical.

Similarly, the HNX Index on August 21 dropped by 3.76 points, or 5.32 percent to 66.89 points, according to Dat Viet.

Feeling anxious, investors have decided to run away. Not only penny stocks, but the blue chips such as EIB, CTG, VCB, STB shares have also seen the prices fall down dramatically. All the 30 shares items of VN30 group on the HCM City bourse saw the prices decrease, of which 27 fell down to the floor prices. Meanwhile, all the 30 share items of HNX30 group on the Hanoi bourse saw the prices decrease and 24 of which falling down to the floor prices.

Tuoi tre newspaper has quoted the managers of ACB as saying that the arrest of Kien has no relation to the bank’s operation, and that this is just a “personal affair” of Kien. However, this could not help ACB shares much. 860,000 ACB shares were traded on the morning of August 21, while 1.87 million shares had been left unsold by the end of the morning trading session.

The board of management of ACB, fearing that the arrest of Kien would badly affect the bank’s liquidity, has requested its branches and transaction offices to halt lending and restrict the disbursement. Directors of branches have been requested to keep a close watch over the liquidity situation and report to the head office about any abnormal things.

Especially, the leadership of the bank has asked the heads and deputy heads of divisions not to leave the office.

Meanwhile, Ly Xuan Hai, General Director of ACB has been summoned by the investigation to provide information relating to Kien.

The colossal fortune of Kien

How rich Kien is has always been a question to everyone. The positions he had been holding until he was arrest could partially show the richness of the white haired big tycoon.

In 1994-2006, Kien was Deputy Chair of ACB, Chair of MTT, a fashion garment company, Chair of Thien Nam Company, Chair of the Caltex bitumen joint venture, Chair of ACB Sports Company, Deputy Chair and then Chair of KFC Vietnam joint venture, Deputy Chair of the Cho Long Tourism Company, Member of the Thien Minh Tourism Company.

Thien Minh has become famous in Vietnam after it spent 45 million dollars in an affair to buy back Victorial hotel chain in early 2011.

Especially, Kien is a big cheese in the banking sector. Unofficial sources have said besides the shares of ACB, Kien also has stakes at Eximbank, Kien Long, Vietbank and Dai A.

No one knows exactly how much land and houses Kien has. He and his family members are living in a villa covering an area of 1.3 hectare located next to the West Lake in Hanoi, which is called the “golden land” in the capital city.

Kien has also been well known as the owner of super luxurious cars. He has a Bentley Continental Flying Spur and has reportedly bought a Rolls Royce Phantom worth 33 billion dong. The two cars alone would cost no less than 43 billion dong.

Kien arrest heats up international press

Not only the domestic public, but the international press has also paid a special attention to the arrest of Kien in Vietnam.

The news about the arrest of Kien have appeared on Asia One, Business Week, Financial Times, AP and BBC.

Especially, Business Week published a big article, recalling the business events in Vietnam relating to the arrest. It affirmed that Kien was arrested after the police found a lot of documents showing the illegal activities of Kien.

In the latest news, the State Bank on the afternoon of August 21 released a notice, reassuring the public that their deposits at ACB are protected by the laws. If necessary, the State Bank would give liquidity support to ensure the timely payment to depositors and the security of the whole banking system.

Compiled by C. V