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Seven bank executives arrested in loan scandal

June 16, 1997

HANOI, Vietnam (AP) _ Police have arrested seven bank executives in Ho Chi Minh City in connection with a growing loan scandal involving the troubled Ming Phung company, official media reported Monday.

Five of the executives worked for the state-run Vietnam Bank for Industry and Commerce and two others for the Vietnam Bank for Foreign Trade.

The bank officials are accused of falsifying loan collateral evaluation certificates to help textile exporter Ming Phung secure large loans from the banks, the state-controlled newspaper Labor reported.

Ming Phung, once a successful company, is now under investigation for a loan fraud involving hundreds of million of dollars in debts that it is unable to repay.

At least 23 executives from Ming Phung and its subsidiaries have been arrested in the growing scandal, including founder and director Tang Minh Phung.

Police suspect the bank executives, arrested this weekend, created fake contracts and falsified sales receipts to obtain some $357 million worth of loans from the two banks combined to cover unprofitable business operations.

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