Two ex-leaders of a former Vietnamese bank and seven other people have been arrested in connection with an investigation into massive losses caused by wrongfully granted loans under their leadership, police said on Tuesday.

All nine people were members of the credit board of Dai Tin (TrustBank), believed to have caused at least VND2.85 trillion ($127.23 million) in losses to the financial institution, according to officers under the economic police unit (C46).

Among them are Hoang Van Toan, the former TrustBank chairman, and the bank’s former CEO, Tran Son Nam, according to a source close to Tuoi Tre (Youth) newspaper. The two ex-bankers and five other defendants have been detained and were transferred to Hanoi to serve the investigation on Tuesday.

The nine all face charges of “violating lending regulations of credit institutions” and “deliberate acts against state regulations on economic management, causing serious consequences.”

The case is in relation to another high-profile fraud case, in which Pham Cong Danh, former chairman of the erstwhile Vietnam Construction Joint Stock Commercial Bank (VNCB), caused VND9 trillion (US$401.79 million) in losses to the state budget whilst in charge of the credit institution.

Danh was sentenced to 30 years imprisonment in September, and had his appeal heard on Tuesday.

In late 2012, Danh, then chairman of the construction and real estate corporation Thien Thanh Group, decided to acquire TrustBank in order to restructure the loss-ridden lender, later renaming it VNCB.

Before transferring TrustBank to Danh, Toan and Nam committed multiple management wrongdoings, causing huge financial damage to the credit institution.

By the time of acquisition, TrustBank already suffered a VND2.85 trillion loss in value, caused by the nine-member credit board, which was led by Hua Thi Phan, who was among those arrested on Tuesday.

Phan was the representative of a group of TrustBank shareholders, which had 29 individuals borrow huge loans from the bank on either no collateral or low-value mortgage terms.

These loans eventually become losses for TrustBank.

The credit board also approved two loan applications for two companies, Dai Hoang Phuong and Thinh Quoc, which eventually resulted in a VND470 billion ($20.98 million) losses.

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