Nguyen Tan Dun, Vietnamese prime minister, has urged central bank officials and police to prosecute swiftly a case of alleged illegal foreign exchange trading by ABN Amro that has seriously alarmed foreign banks operating in the Communist-ruled country.
With the high-profile case threatening to inflict serious damage on Vietnam’s image, the premier ordered police quickly to “clarify the violations and crimes” of all those involved in speculative foreign currency trades that resulted in losses of up to $5.4m to the state-owned Industrial and Commercial Bank of Vietnam, or Incombank.
However, in the directive, issued this week, the premier indicated that ABN employees could be spared criminal prosecution if the Dutch bank compensated the state for the lost money.
The premier told authorities they “must ensure transparency, minimise losses to the state and must not allow it to affect the investment environment”, the Communist party’s Nahn Dan newspaper reported. The Vietnam News Agency said ABN’s foreign exchange transactions with the Bank for Agriculture and Rural Development would also be investigated.
The premier’s intervention escalates what began more than eight months ago as a commercial dispute between Incombank, one of Vietnam’s big four state-owned commercial banks, and ABN Amro.
The case has strained Hanoi’s ties with the Netherlands, and upset western business groups, which have expressed concern that authorities were criminalising normal business practices.
ABN’s woes in Vietnam started in March when Incombank officials discovered an employee had lost money in speculative foreign currency trading.
Causing economic losses to the state is a crime in Vietnam and Incombank demanded that the Dutch banking group, the counter-party bank, compensate it.
ABN said it did nothing wrong by executing the transactions. However, two Vietnamese employees of ABN have been jailed for months and another two are under house arrest – local laws allow authorities to hold criminal suspects for up to 16 months while investigating.
While no formal charges have been filed, Vietnamese police have repeatedly accused ABN and its employees of violating Vietnamese laws, including failing to register its foreign exchange traders.