Vietnam state oil magnate arrested in major fraud case

Deputy head of PetroVietnam Ninh Van Quynh allegedly invested in Ocean Bank, which nearly collapsed after becoming embroiled in a multimillion dollar fraud scandal of its own. PHOTO: REUTERS

HANOI (AFP) - The deputy head of Vietnam's largest oil firm, state-run PetroVietnam, was arrested Friday (Sept 1) as part of a massive fraud case involving dozens of bankers and businessmen, according to the government.

The country is notorious for widespread corruption but in recent months has waged a crackdown on banking executives and government officials accused of graft, mismanagement or worse.

The latest to fall is Ninh Van Quynh, 59, number two at PetroVietnam who is accused of causing losses worth US$34 million at the massive oil firm.

He allegedly invested the money in Ocean Bank, which nearly collapsed after becoming embroiled in a multimillion dollar fraud scandal of its own.

Quynh is accused of violating state regulations to make the investment.

His arrest comes amid a closely-watched trial of 51 bankers and businessmen, mostly from Ocean Bank.

"The move comes during the second phase of investigation in the Ocean Bank case," the Ministry of Public Security said on its website.

Another PetroVietnam official was arrested along with Quynh and two others placed under house arrest as part of the broadening investigation, it said.

The massive trial under way in Hanoi includes the former chairman of PetroVietnam, as well as the former head of Ocean Bank, who is accused of dodgy loans worth US$23 million.

The 20-day trial is the largest banking case in Vietnam, involving 50 defence lawyers and more than 700 witnesses.

It has captivated the public in the communist nation, where stunning economic growth has largely lifted the majority out of poverty, but has also seen a rise in the super-rich.

The government is keen to clean up its image, which analysts say is partly behind its recent anti-corruption drive.

Though some say that convictions and arrests are more about political infighting than an actual commitment to reform.

Last month, Germany accused Hanoi of kidnapping a former PetroVietnam official in a Berlin park over a separate corruption case, calling the move a "scandalous violation".

Hanoi said the official, who was the head of the company's construction unit, turned himself into officials in Vietnam's capital voluntarily.

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