Dutch bank ABN Amro has dug deep and done a very decent thing as Christmas approaches - paying $4.5m in what is effectively a ransom to free four of its employees who have been held in Vietnam, in prison or under house arrest, in connection with a series of disputed foreign exchange trades.
For the past 9 months, four ABN Amro staff (all locals) have been detained without charge- effectively as hostages - for their involvement in what authorities claim were over 500 illegal foreign-exchange transactions between the Hanoi branch of ABN Amro, and the state-owned Industrial & Commercial Bank of Vietnam (Incombank). The state-owned bank claims to have lost $5.4m because of the trading.
According to The Financial Times, ABN made the payment after formal talks at the weekend with Vietnamese authorities. Vietnamese prime minister Nguyen Tan Dung had earlier suggested that prosecutors might be prepared to waive any prosecution of the four bank employees in the event that ABN coughed up. Nguyen Thi Quynh Van, the so-called Incombank rogue trader who allegedly used a stolen computer password to execute the disputed transactions with ABN staff, could face death by firing squad if he is found guilty of wrongdoing.
ABN has consistently said that its staff had done nothing wrong, insisting that the bank merely acted as counterparty for the disputed transactions. Major foreign firms like Citigroup and HSBC have expressed concern over the affair, which will not do much good for Vietnam's image in the financial community (the country is about to join the World Trade Organisation). As The Wall Street Journal also points out, this case 'has also strained Vietnam's relations with the Dutch government'.
At least ABN Amro has come out of this affair looking good.
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