Banking tycoon Nguyen Duc Kien, whose arrest last year sent shockwaves across the country, has received one more charge over "evading taxes", the Ministry of Public Security has announced.
Kien, 49, co-founder of Asia Commercial Joint Stock Bank (ACB), one of Vietnam’s largest banks, has previously been charged under “committing illegal business activities,” “intentionally violating State regulations on economic management, causing serious consequences,” and “cheating to misappropriate other people's assets.”
The multi-millionaire used to be one of the 20 richest persons in Vietnam based on stock reports, and was deputy chairman of the Vietnam Professional Football Joint Stock Co (VPF) and chairman of Hanoi Football Club.
According to investigators, in 2009, Kien signed two contracts with a bank and his younger sister, to authorize the latter to carry out the gold trading business on his behalf.
The move was made in the context that the National Assembly had released a policy to exempt personal income tax in the first six months of that year, so that Kien could avoid paying a total of VND25 billion worth of taxes, officers said.
Against the law
In December 25, 2008, the B&B Co, founded by Kien and managed by CEO Dang Ngoc Lan, inked two financial investment authorizing contracts over gold trading with ACB and Nguyen Thuy Huong, the mogul’s sibling.
Specifically, in the first contract, B&B authorized ACB to conduct the gold trading on the overseas market following its directive by documents.
On the second deal, Huong, who is also the co-founder of B&B, authorized for B&B to conduct gold trading transactions on the domestic and overseas markets following her directive.
It was also stated in the contract that in case the business yields profits, Huong only has to pay 1 percent of the profit to the company.
After the contracts were closed, from December 25, 2008 to the end of June 2009, B&B repeatedly asked ACB to trade gold, and the company ended up raking in more than VND68.8 billion.
According to the contract, B&B paid more than VND68 billion, or 99 percent of the profit, to Huong, while received only VND688 million as its profit.
Later, when completing the corporate declaration, B&B reported only the VND688 million profit, instead of the VND68 billion it paid Huong.
However, investigators said the contract between Huong and B&B was illegal as the company was not licensed by the State Bank of Vietnam to trade gold overseas.
Hence, all of the profits from gold trading it received from ACB was considered company revenues, and must be taxed VND25 billion.
Kien’s assigning the company to close the contract with Huong was thus an act deliberately done to transform the corporate income into personal income to enjoy the tax break, investigators said in explaining why Kien was charged under “evading taxes.”