The chairman of Sacombank, the headline grabbing institution thrust into the spotlight following the arrest of two former executives on charges relating to enormous financial damages, has shed light on allegations that the bank’s ex-deputy chairman still owes nearly US$2 billion to the lender.
Ex-Sacombank deputy chairman Tram Be was arrested and taken into four-month custody on charges of “deliberately acting against the state's regulations on economic management, with serious consequences” for his role in a massive bank fraud scandal that caused losses of over US$288 million.
Shortly after his Tuesday arrest, information circulated that the banking tycoon still owes the institution VND43 trillion ($1.89 billion).
However, Sacombank chairman Duong Cong Minh contradicted that claim on Thursday with a statement to Tuoi Tre (Youth) newspaper noting that “Be did not borrow any money, or hold any debt at Sacombank.”
The debts in question are not owed by Be, but rather two separate debts Be was responsible for handling, Minh underlined. The two debts are worth VND35.4 trillion ($1.56 billion), while the total value of the collateral assets backing these liabilities is VND43 trillion, according to the chairman.
“Prior to his [February] leadership termination and his August 1 arrest, Be was deputy chairman, and as per the law, Be and his relatives are prohibited from borrowing from Sacombank,” Minh explained.
Loan handling ensured
Minh added that the Tram Be’s so-called “debts” at Sacombank are in fact money owed by different individuals and organizations whose agreements with the bank were under the ex-executive’s management.
The Sacombank chairman elaborated that even though Be is responsible for the debts, handling each task involved is done by other Sacombank employees. “As the bank chairman, I am the one who takes the highest responsibility,” he said.
|Sacombank chairman Duong Cong Minh|
Minh also underlined that Be’s arrest will not affect the money owed to the institution, as “all of these are backed by collateral assets with valid papers and high liquidity more valuable than the money lent.”
He elaborated that the debts under Be’s management are backed by VND33 trillion ($1.45 billion) in property and VND10 trillion ($440.53 million) in stock.
The realty assets used to guarantee for the debts are land plots in ‘prime’ locations in central districts in Ho Chi Minh City, including District 1, 3 and 5, as well as in District 8 and 9, Long An Province, and Can Tho City, he added.
“The value of these properties and stocks are bigger than the loans so ensuring a return will be an issue,” he pressed.
Be was arrested and placed under investigation for mismanagement that resulted in losses only in the Vietnam Construction Joint Stock Commercial Bank (VNCB), and “Sacombank suffered no damages,” Minh said.
The chairman said he publicizing this information to prove that Sacombank is capable of retaining its transparent operations even though its former executives are dealing with the law.
“We want to tell the society that we are indeed under a hardship, but it is not impossible to overcome these hard times,” he said.
Sacombank logged VND754 billion ($33.22 million) in pretax profit in the Jan-Jul period, overshooting its target by 29 percent.
“This means it is totally possible for us to meet or exceed our full-year target of VND1 trillion [$44.05 million],” he said.