Vietnamese banking tycoon arrested in $400 million graft case

By Quoc Thang August 1, 2017 | 02:04 am PT

Tram Be is collecting shareholders' votes on the merger between Sacombank and Phuong Nam Bank in July 2015. Photo by VnExpress/Le Chi

Tram Be, a former Sacombank exec, is accused of breaking regulations in the biggest ever fraud case to rock the banking sector.

Police in Vietnam have arrested a banking tycoon in connection with a fraud case that involved VND9 trillion ($400 million) going missing from the banking system.

Tram Be, former deputy chairman of Sacombank, was arrested along with Phan Huy Khang, former Sacombank CEO, and 14 other former employees of various banks and companies. Nine others have been charged but are out on bail.

According to police, Be, 58, helped Pham Cong Danh, a former chairman of Vietnam Construction Bank (VNCB), steal VND1.8 trillion from VNCB.

In October last year, a court convicted Danh and 35 other bank employees of stealing more than $400 million, the largest sum ever scammed out of Vietnam's scandal-hit banking sector.

The investigation found that Danh and other bankers from VNCB secretly withdrew money from clients' savings accounts and used the cash to secure loans from other banks or to deposit into their own accounts.

Pham Cong Danh got 30 years behind bars while his accomplices received between 22 years in jail and three years probation.

Police have now found that Be helped Danh borrow VND1.8 trillion from Sacombank by using his position to evade banking regulations.

Be processed Danh's loan in just a day, taking an illegal deposit from VNCB as a guarantee.

Danh spent VND1.7 trillion on paying back debts at another local bank for six companies that he owned, and deposited the rest in a personal account.

Police are searching Be’s house in Saigon’s District 1 for more evidence. He is facing charges of deliberately violating state regulations on economic management, causing serious consequences.

Phan Huy Khang, the former CEO of Sacombank who was accused of abetting the fraud, was also arrested Wednesday.

The Ho Chi Minh City-based lender, full name the Saigon Thuong Tin Commercial Joint Stock Bank, is the country’s fifth largest partly-private bank in terms of total assets, which rose to an estimated VND290.86 trillion ($12.77 billion) after a merger with Phuong Nam (Southern) Bank in 2015.

The State Bank of Vietnam forced Be and his son Tram Khai Hoa to resign from Sacombank’s management board earlier this year.

Their departure was part of the government's effort to reform the banking system, the central bank said in a statement released in February.