Residents in the north-central Vietnamese province of Nghe An have reported losing over VND30 billion (US$1.32 million) after depositing their savings into a local gold shop following its bankruptcy last year.

The police department in Yen Thanh District confirmed on Monday they had received multiple reports regarding the Phuc Nhien gold shop.

In 2015, the owner of the gold shop started issuing unofficial savings books and encouraged local residents to make their deposits.

The clients were promised annual interest of 7.5 percent and allowed to withdraw their money whenever they wanted.

The average interest rate at a Vietnamese bank is about 6.5 percent per year.

A total of 83 households have made their deposits totaling more than VND30 billion ($1.32 million) in various currencies including VND, US$, EUR, and GBP.

L.A.D., 62, who deposited about $5,520, said he was unable to receive his interest or withdraw his original savings when the shop announced its bankruptcy in 2017.

The savings books the gold shop issued to local residents. Photo: Tuoi Tre

Many people have recently gathered at the Phuc Nhien gold shop to demand their money back.

According to the observation of Tuoi Tre (Youth) newspaper reporters on Sunday, the facility was closed while its signboard had already been taken down.

Documents from the provincial Department of Planning and Investment showed that the business started operations in 2011 and was granted the license for monetary intermediation and sale of gold and jewelry.

The venue is not permitted to mobilize deposits, Ha Van Dat, an official from the planning department said, adding that the business is still active in the department’s database.

Doan Manh Ha, deputy director of the State Bank of Vietnam’s branch in Nghe An Province, asserted that Phuc Nhien had violated the law on credit institutions by issuing their own savings books and mobilizing deposits from local residents.

Competent agencies have launched an investigation into the case.

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