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Former PetroVietnam chairman arrested for abusing power to appropriate assets

Former PetroVietnam chairman arrested for abusing power to appropriate assets

Wednesday, July 22, 2015, 14:35 GMT+7

Police from the Ministry of Public Security on Tuesday captured Nguyen Xuan Son, ex-chairman of state-owned Vietnam National Oil and Gas Group or PetroVietnam, for his wrongdoings when he was CEO of a bank.

>> An audio version of the story is available here

Police officers detained Son yesterday afternoon when he was discharged from Bach Mai Hospital in Hanoi, where he was treated for hypertension, and they later searched his house in the Ciputra urban area in the capital at 6:00 pm.

Son, 53, has been charged with “negligence of responsibility, causing serious consequences,” and “abusing positions and powers to appropriate property,” police said.

The ex-chairman of PetroVietnam is accused of committing these wrongdoings when he was CEO of Hanoi-based Dai Duong Commercial Joint Stock Bank (Ocean Bank) for about two years from 2008.

On July 19, 2015, Prime Minister Nguyen Tan Dung signed a decision to remove Son from the chairmanship of PetroVietnam.

Before his removal, police had summoned Son for questioning many times on his illegal acts at Ocean Bank.

During two years as CEO of Ocean Bank, Son directed his staff to collect a lending fee from customers who took out loans.

The collection of this fee was against the lending regulations of the State Bank of Vietnam (SBV), investigators said, adding that Ocean Bank and its branches earned an illegitimate income of dozens of billions of dong (VND1 billion = US$45,830) through the charge.

Son also ordered staff members to pay additional interest worth billions of dong on deposit accounts to boost Ocean Bank’s capital mobilization from clients.

Such payment of extra-interest was against the regulations of the SBV, according to investigators.   

Ocean Bank once had many large shareholders, including PetroVietnam, which invested VND800 billion ($36.6 million) in the bank.

However, after Ha Van Tham, ex-chairman of Ocean Bank, was arrested on October 24, 2014, the bank’s operations went downhill, and the SBV had to buy the lender for zero dong.

That means PetroVietnam lost its entire stake at Ocean Bank, and Son was found to be involved in the loss.

He is also suspected of being involved in illegal acts uncovered in 2012 at Hanoi-based Global Petroleum Bank, which was later put under special control by the SBV, according to news website VietNamNet.

Son, from the north-central province of Ha Tinh, was made chairman of PetroVietnam on July 8, 2014 by PM Dung, according to the group.

He began working in the oil and gas sector in 1984, in the Finance and Accounting Bureau under PetroVietnam.

From 2003 to October 2006, he was vice general director of the PetroVietnam Finance Company before being promoted to the firm’s top boss in May 2007.

In December 2008, Son was named CEO of Ocean Bank, and in November 2010, he was appointed vice general director of PetroVietnam, and then chairman of the group last year.

Son graduated from the National Economics University and the Petroleum Cadre Training School. 

He also holds a master’s degree in business administration granted by the University of South Carolina, according to VietNamNet.

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Police from the Ministry of Public Security on Tuesday captured Nguyen Xuan Son, ex-chairman of state-owned Vietnam National Oil and Gas Group or PetroVietnam, for his wrongdoings when he was CEO of a bank.

>> An audio version of the story is available here

Police officers detained Son yesterday afternoon when he was discharged from Bach Mai Hospital in Hanoi, where he was treated for hypertension, and they later searched his house in the Ciputra urban area in the capital at 6:00 pm.

Son, 53, has been charged with “negligence of responsibility, causing serious consequences,” and “abusing positions and powers to appropriate property,” police said.

The ex-chairman of PetroVietnam is accused of committing these wrongdoings when he was CEO of Hanoi-based Dai Duong Commercial Joint Stock Bank (Ocean Bank) for about two years from 2008.

On July 19, 2015, Prime Minister Nguyen Tan Dung signed a decision to remove Son from the chairmanship of PetroVietnam.

Before his removal, police had summoned Son for questioning many times on his illegal acts at Ocean Bank.

During two years as CEO of Ocean Bank, Son directed his staff to collect a lending fee from customers who took out loans.

The collection of this fee was against the lending regulations of the State Bank of Vietnam (SBV), investigators said, adding that Ocean Bank and its branches earned an illegitimate income of dozens of billions of dong (VND1 billion = US$45,830) through the charge.

Son also ordered staff members to pay additional interest worth billions of dong on deposit accounts to boost Ocean Bank’s capital mobilization from clients.

Such payment of extra-interest was against the regulations of the SBV, according to investigators.   

Ocean Bank once had many large shareholders, including PetroVietnam, which invested VND800 billion ($36.6 million) in the bank.

However, after Ha Van Tham, ex-chairman of Ocean Bank, was arrested on October 24, 2014, the bank’s operations went downhill, and the SBV had to buy the lender for zero dong.

That means PetroVietnam lost its entire stake at Ocean Bank, and Son was found to be involved in the loss.

He is also suspected of being involved in illegal acts uncovered in 2012 at Hanoi-based Global Petroleum Bank, which was later put under special control by the SBV, according to news website VietNamNet.

Son, from the north-central province of Ha Tinh, was made chairman of PetroVietnam on July 8, 2014 by PM Dung, according to the group.

He began working in the oil and gas sector in 1984, in the Finance and Accounting Bureau under PetroVietnam.

From 2003 to October 2006, he was vice general director of the PetroVietnam Finance Company before being promoted to the firm’s top boss in May 2007.

In December 2008, Son was named CEO of Ocean Bank, and in November 2010, he was appointed vice general director of PetroVietnam, and then chairman of the group last year.

Son graduated from the National Economics University and the Petroleum Cadre Training School. 

He also holds a master’s degree in business administration granted by the University of South Carolina, according to VietNamNet.

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