Gov’t to tighten oversight of banking, securities following recent scandals

The headquarters of Saigon Commercial Bank in HCM City’s District 1. Experts characterise the SCB scandal, the biggest scandal in the banking history, as a “typical” example of banking violations. — VNS Photo Bồ Xuân Hiệp.

HCM City — The Government is taking steps to increase oversight of the banking and securities sectors in response to recent scandals, including those at Saigon Joint Stock Commercial Bank (SCB).

During the sixth session of the 15th National Assembly, the NA has directed the government and relevant agencies to enhance inspection of these sectors after several serious violations were discovered.

The NA has also called for scrutiny in other areas such as land management, resource utilisation, state property, public asset bidding and procurement, auctions, finance, corporate bond market, basic construction, and organisational personnel.

The government has been urged to swiftly identify and prevent corruption and negative activities that impact the public and businesses.

Officials have been directed to take action and hold leaders accountable for any corruption or negative activities.

Recent cases involving bank and corporate bond market violations, such as those at the Tân Hoàng Minh Group, Vạn Thịnh Phát Group, and SCB, have prompted the need for increased oversight and regulations, experts warned.

The most serious case involved the embezzlement of US$12.36 billion from SCB, leading to charges against Trương Mỹ Lan, chairwoman of Vạn Thịnh Phát Group, for embezzlement, violations of banking operations, and bribery.

After facing a bank run in October 2022, SCB was taken over by the central bank to minimise the negative impact to SCB customers and the overall sector.

In October last year, Lan and several others were arrested for alleged fraud related to the issuance and trading of bonds worth trillions of đồng.

Following the arrest, depositors rushed to SCB to withdraw their money as they believed the chairwoman was a major shareholder of SCB, one of Việt Nam’s largest private banks.

Meanwhile, Đỗ Thị Nhàn, head of the inter-agency bank inspection delegation, is also accused of accepting bribes of $5.2 million (around VNĐ120 billion), the largest sum of bribes ever in Việt Nam to date, to conceal serious wrongdoings at SCB.

Experts have highlighted the SCB scandal, the biggest scandal in Việt Nam’s banking history, as a “typical” example of banking violations, with banks becoming a “playground” for businesses.

“The SCB scandal is just ‘the tip of the iceberg’, as other commercial banks are also grappling with “similar issues” when businesses use banks as a means to obtain loans,” a source with knowledge in the banking sector, who asked not to be identified, told Việt Nam News.

In addition to the SCB case, Đỗ Anh Dũng, chairman of Tân Hoàng Minh Group, is accused of embezzling billions of Vietnamese đồng from bondholders.

In response to these matters, the government has issued a resolution on the national strategy on corruption and negative phenomena prevention and control to 2030.

The resolution implements major measures to combat corruption and strengthen supervision, monitoring, inspection, audit, investigation, prosecution, and judgment activities.

Other solutions include improving the efficiency of international cooperation in anti-corruption and fully implementing national rights and obligations as a signatory of the UN Convention against corruption.

General Secretary Nguyễn Phú Trọng recently chaired a meeting of the Party’s Central Steering Committee for Anti-Corruption to discuss the handling of certain cases falling under the committee’s supervision.

The committee also discussed the violations and responsibilities of organisations and individuals in making and issuing policies and laws related to banking, finance, State assets, valuation, financial autonomy, securities, and corporate bonds.

According to a report by the Party’s Central Steering Committee, it will continue to monitor and direct the handling of 68 cases of corruption and 45 incidents by the end of 2023.