[Vnbiz] Banks worry over planned prosecution

[Craig Stevenson]

Major foreign banks in Vietnam have expressed concern to the country's
central bank over the threatened criminal prosecution of several ABN Amro
Holding NV <javascript:void(0);> staff in connection with a currency-
trading dispute, a development that has tainted the reputation of this
fast-growing economy.

The dispute involves almost 600 foreign-exchange transactions between the
Haiphong branch of state-owned Industrial & Commercial Bank of Vietnam,
known as Incombank, and the Hanoi branch of ABN Amro <javascript:void(0);>.
Vietnamese police accuse four Vietnamese staffers at the Dutch bank of
complicity with Incombank currency traders, who lost more than $5 million in
a series of transactions between April 2003 and February 2006.

In a letter dated Sept. 1, the Banking Working Group of the Vietnam Business
Forum -- which represents foreign banks in Vietnam -- wrote to the State
Bank of Vietnam expressing "grave concern" that the ABN
Amro<javascript:void(0);>case indicates that nongovernment-owned and
foreign banks could be held
criminally liable if "normal" trading transactions result in losses to
state-owned banks.

The group warned the case is bringing adverse publicity to Vietnam, one of
Asia's hottest emerging markets and the location of a November Asian-Pacific
summit to be attended by President Bush and other leaders including those of
China, Japan and some Latin American nations.

The letter was signed by senior Vietnam-based executives of Australia & New
Zealand Banking Group Ltd., Citigroup Inc. <javascript:void(0);>, HSBC
Holdings PLC, Standard Chartered PLC <javascript:void(0);> and Societe
Generale <javascript:void(0);> SA, among other banks.
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