Big fish, rickety boat

24 August 2012 By Wayne Arnold

The arrest of tycoon Nguyen Duc Kien has roiled the country’s tiny stock market. Never mind that he no longer controls the bank he founded: with weak banks, widespread corruption and poor governance, investors fear that if he goes down, he may take the financial system with him.

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The State Bank of Vietnam said Aug. 23 that it was committed to supporting one of Vietnam’s biggest lenders, Asia Commercial Bank, and that its depositors’ money was safe, after the arrest of the bank’s founder prompted many customers to withdraw their funds. Police on Aug. 20 arrested Nguyen Duc Kien, a member of one of the country’s richest families, for alleged irregularities at three investment companies he runs.
Kien’s arrest sent the country’s benchmark stock index down 4.7 percent Aug. 21, its biggest one-day loss since late-2008.

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