Hanoi: Asia Commercial Bank’s chairman and two other executives resigned, as the Vietnamese lender grapples with a police probe that’s dragged down the nation’s stocks on concern it may engulf the broader financial industry.

ACB, Vietnam’s biggest bank that isn’t owned by the government, said Chairman Tran Xuan Gia and two deputies approved the deposit of 718 billion dong (Dh124 million) of the company’s funds at another bank. The board accepted their resignations on September 18, the bank said in a statement recently .

“From a market perspective, the recent uncertainty shows no signs of ending,” said Fiachra MacCana, managing director of Ho Chi Minh City Securities Corp. “Resignations from the boards at these banks are likely to add fuel to that fire over the next couple of weeks.”

A former executive at ACB, Pham Trung Cang, resigned as vice-chairman of Vietnam Export-Import Commercial Joint Stock Bank, online news service CafeF reported on Wednesday, citing Le Hung Dung, chairman of the company known as Eximbank.

Standard Chartered

Standard Chartered Plc holds a 15 per cent consolidated stake in ACB, according to Louis Taylor, CEO of the London-based lender’s Vietnam unit. Taylor declined to comment on the resignations. Sumitomo Mitsui Banking Corp, a unit of Japan’s second-biggest lender by market value, owns 15 per cent of Eximbank, data compiled by Bloomberg show.

Vietnam’s benchmark stock index dropped 1.8 per cent at the 11:30 am break, the most among 23 gauges in Asia tracked by Bloomberg, as bank shares fell. ACB lost 5 per cent, heading for its lowest close since at least February 2007. Eximbank slid 3.6 per cent, poised for the lowest since December 12.

The scandal adds to challenges for Prime Minister Nguyen Tan Dung’s government as it seeks to shore up a banking system saddled with the highest bad debt in Southeast Asia. Economic growth slowed to 4.4 per cent in the first half as lending stagnated, damping state revenue and company profits.

Approved Deposits

ACB Chairman Gia, a former government minister, quit because of a “health issue,” while vice-chairmen Le Vu Ky and Trinh Kim Quang resigned for undisclosed personal reasons, the bank said. The three executives were involved in approving former CEO Hai’s alleged authorisation of 19 bank staff to deposit funds at Vietnam Joint-Stock Commercial Bank for Industry and Trade, or VietinBank, ACB said in the statement.

ACB has taken legal action against VietinBank to secure the return of its deposits, Tran Mong Hung, former chairman and now adviser to the management board, said in an interview with Saigon Tiep Thi newspaper published on the lender’s website.

Tran Hung Huy was appointed as chairman and Julian Fong Loong Choon and Luong Van Tu were named vice-chairmen. Huy is the son of former chairman Hung and board member Dang Thu Thuy, Deputy CEO Nguyen Thanh Toai said by telephone.

Quang declined to comment when contacted by reporters, and Gia and Ky couldn’t be reached by phone. Nguyen Van Thang, VietinBank’s general director, declined to comment. Eximbank CEO Truong Van Phuoc and Deputy CEO Tran Tan Loc couldn’t immediately be reached on their mobile phones to confirm the report on Cang’s resignation. Efforts to contact Cang were unsuccessful.

First Chairman

Cang is a co-founder of ACB and served in several roles at the lender, including as its first chairman and later chief executive officer, according to its website. Gia was Vietnam’s minister of planning and investment from 1996 to 2002.

Kien was charged last week with intentionally violating state regulations on economic management and committing “fraud to appropriate assets,” according to a statement on the Ministry of Public Security’s website. Police didn’t say at which company the alleged violations took place. His arrest was for violations at three companies he oversaw and he wasn’t managing ACB when he was detained, according to a central bank statement.

“Vietnam will clean up its banking system and any individuals found in violation will be dealt with strictly, leaving “no restricted areas,” Government Office Chairman Vu Duc Dam said in a statement on the state website this month.