Last update: 15:03 | 02/09/2017
The Vietnam National Oil and Gas Group (PetroVietnam) has said it was co-operating with police on the investigation of deliberate violation of state regulations by five officials.
Former Chairman of the PetroVietnam's Member Council Nguyen Xuan Son at a trial on August 30.
PetroVietnam sent out a press release after the Police Investigation Agency on September 1 arrested and prosecuted five officials including deputy general director Ninh Van Quynh, former Chairman of the group's Member Council Nguyen Xuan Son, and three ex-members of the Council, Nguyen Xuan Thang, Nguyen Thanh Liem, and Vu Khanh Tuong, for deliberately violating state regulations and causing serious consequences
"The arrest and prosecution were made as part of the police's investigation into the group's investment in the Ocean Commercial Joint Stock Bank," the press release wrote. "PetroVietnam is actively co-operating with the investigation."
According to the group, the incident will not affect their business activities.
"We have suspended deputy general director Ninh Van Quynh and rearranged personnel right after receiving the criminal proceedings from the investigation agency," the group said in its announcement, adding that they hope to receive sharing and support from clients and partners to overcome this challenge."
The Ocean Commercial Joint Stock Bank (Ocean Bank) was founded in 1993 with a 20 per cent stake from the Ocean Group conglomerate, which also invests in hospitality, securities, media, and retail.
In 2008, Ocean Bank increased its charter capital to VND2 trillion (USD88.13 million) and PetroVietnam contributed VND400 million or 20 per cent stake. When the bank continued to raise charter capital to VND3.5 trillion in 2009 and VND4 trillion in 2011, the state-owned petrol group also increased its investment to maintain its 20 percent stake.
A report showed that by March 31, 2014, Ocean Bank's bad debts rose by nearly VND15 trillion (USD661 million).
In May 2015, the State Bank took over Ocean Bank after the bank reported losses of USD445 million and bad debts accounted for nearly 50 per cent of its total outstanding loans. This means PetroVietnam lost VND800 billion (USD35.25 million) of its 20 per cent stake in the bank.
It is said that PetroVietnam did not report any problems at Oceanbank despite sending three staff to supervise the bank's operation during that time.
According to the indictment, Nguyen Xuan Son - who represented PetroVietnam’s stake at Ocean Bank, had abused his position to organise and instruct illegal activities to appropriate VND246 billion (over USD10.8 million)
At a trial on August 30, Nguyen Xuan Son listed individuals and agencies at the state-own petrol group which received his bribes.
Ocean Bank remains active in real estate and hotels and services and was valued at about USD3.5 million last year, according to its website.