The chief of Peregrine Investments Holdings' (PIH) Vietnamese operations, Nguyen Trung Truc, is under detention on tax evasion charges in the latest blow to the investment bank's regional ambitions. Ho Chi Minh City prosecutors on Monday arrested the Vietnamese-Australian businessman in his private office at the headquarters of Peregrine Capital Vietnam following more than 10 months of investigations. Truc faced further questioning in custody and was likely to be on trial within four months, officials said. A PIH statement in Hong Kong yesterday said the charges were believed to relate to Truc's personal tax affairs and those of local companies with which he was associated. Relatives said Truc was shocked when police arrived at his office. They are working with Australian diplomats to gain access to him. Within hours of Truc's arrest, his position as managing director had been filled by Judd Kinne, a director on PIH's executive committee and managing director of Peregrine Securities Singapore since 1989. Ho Chi Minh City authorities have yet to detail charges and possible penalties against Truc, by far the most flamboyant of Vietnam's first major foreign investors. The arrest warrant was signed by the head of the city's prosecution investigation department, Nguyen Duy Dung, who last July vowed to charge Truc and his wife Deidre Low Aili for tax evasion. Ms Low, a Malaysian-Chinese, had not been arrested but was not allowed to leave Vietnam, Truc's relatives said. Their four children have returned to Kuala Lumpur. Truc's sister, Nguyen Thi Cuc, is in jail following her arrest last August on similar charges. One of Truc's staff, Pham Thi Loan, also was detained on Monday. Allegations concerning Truc have received extensive coverage in the state press. Eight firms connected to Truc and his relatives had their licences revoked last month when the Ho Chi Minh City People's Committee handed down fines of US$100,000 against Peregrine Capital Vietnam and its affiliates for violations of their business licences. PIH group legal counsel Alan Mercer yesterday said PIH had told authorities a fine of US$59,000 against Peregrine Capital Vietnam itself for operating a business from an office without a proper licence was 'excessive in the extreme'. He said PIH had considered the matter closed and the latest charges came as a 'bolt from the blue'. 'Naturally, we are concerned about Mr Truc and his family and are doing everything we can to assist the Australian consulate in Ho Chi Minh City in its efforts to secure bail for him,' he said. 'Unfortunately, we have not been able to speak to Mr Truc since his arrest.' Truc and Ms Low set up Peregrine Capital Vietnam in 1991, backed by a 60 per cent equity stake from Peregrine Investments Hong Kong. While swiftly building up a distribution network, including licences for Mercedes-Benz, Honda, and Johnson & Johnson consumer goods, Truc also snared an investment advisory licence which remains unique. Mr Mercer said PIH moved into distribution through local partners due to the slow development of capital markets, a core PIH trade. 'Our Vietnam distribution business, after holding out much promise, has been a disappointment,' he said. Ten days ago, the founder of PIH-managed SES Securities in Bangladesh was among 36 brokers, dealers and company executives accused by regulators of being responsible for the stock market crash in December. PIH has denied any wrongdoing and has sent a letter of protest to the Bangladeshi Prime Minister. In January, the investment bank also decided to close much of its business in Burma after a dispute led to the sacking of the operation's former chairman and an ensuing legal battle in which the bank won damages of US$4.1 million. Early last year, it revealed it had sacked most of its 15 Australian staff after discovering its Brisbane office had taken an unauthorised stake in a company, which resulted in a write-off.