27 Aug 2012

ACB under pressure after arrest of chief executive

10:34 am on 27 August 2012

One of Vietnam's biggest banks is trying to reassure customers their money is safe after being caught in a corruption scandal.

Asia Commercial Bank founder and chief executive Nguyen Duc Kien, one of Vietnam's richest businessmen, was arrested in Hanoi last Monday on suspicion of "economic violations".

Shares in ACB slid as a result, causing depositors to panic. The BBC reports about five trillion dong ($US240 million) was withdrawn from ACB on Wednesday.

Since Wednesday, the State Bank of Vietnam has injected 17 trillion dong into the commercial banking sector in an effort to mollify depositors and the market.

Mr Kien, who has a stake of almost 5% in ACB, is not involved in the day-to-day running of the bank. He is seen as politically well-connected and has close ties to Prime Minister Nguyen Tan Dung.

A BBC correspondent says the case has deepened concerns about the financial stability of a country that was once seen as an emerging Asian giant.

ACB previously faced a run on its deposits in 2003 after rumours, which were later proved false, spread about the arrest of one of its executives at the time.