Tran Xuan Gia, chair of big Vietnamese lender, resigns

Three executives at a large Vietnamese bank have resigned amid a deepening investigation into a scandal that has shaken investor confidence in the country.

Asia Commercial Bank (ACB) said on Wednesday that it had approved the resignation of chairman Tran Xuan Gia and two deputies. The Tuoi Tre newspaper said a fourth executive now at Eximbank had also stepped down because he was at ACB when the scandal occurred.

Vietnam's crowded banking sector is believed to have bad debts of up to 10 per cent of outstanding loans and is one of the greatest risks to a once booming economy now slowing. The government has pledged to restructure the sector, but there are doubts it has the will to do so.

Last month, ACB's former chief executive Ly Xuan Hai and Nguyen Duc Kien, a superwealthy founder of the bank, were arrested for "improper lending", causing a run on the bank and a large drop in the country's stock market. The arrests triggered speculation of a damaging power struggle with the country's normally secretive political and economic elite.

ACB said the executives had resigned for approving a decision by Hai to allow staff to withdraw US$34 million to deposit in another bank. It gave no further details.

The bank said it had appointed a new chairman and two deputies, including a representative of Standard Chartered which owns 15 per cent of ACB's shares.

The changes were aimed at "consolidating the management strength, enabling ACB to assert its position as a leading joint stock bank in Vietnam", it said.