Government Inspectorate discovered violations at MB, ACB, OCB, VIB banks...

DNVN - The Government Inspectorate has just concluded on compliance with legal policies on issuing individual corporate bonds and using funds from individual corporate bonds (from January 1, 2015 to June 30, 2023).

Of which, there are 5 joint stock commercial banks: Military Commercial Joint Stock Bank (MB), Asia Commercial Joint Stock Bank (ACB ), Vietnam Prosperity Joint Stock Commercial Bank (VPBank), Vietnam International Commercial Joint Stock Bank (VIB), and Orient Commercial Joint Stock Bank (OCB).

According to data compiled from reports of 5 credit institutions (CIs), in the period from January 1, 2015 to June 30, 2023, 05 CIs successfully issued 386 corporate bond codes (non-convertible bonds, without warrants, without collateral); term from 01-10 years; bond interest rate: fixed interest rate or floating interest rate, in which floating interest rate = reference interest rate plus (+) margin from 0.1% to 2.5%) with a total issuance value of VND 255,142.86 billion, the purpose of issuance is to increase the capital scale of CIs, supplement Tier 2 capital and other capital to serve customers, serve the credit needs of CIs.

Illustration photo.

As of June 30, 2023, at 05 credit institutions, there were 173 corporate bond codes in circulation with a total value of VND 97,828.6 billion; The Government Inspectorate inspected 85 corporate bond codes at 05 credit institutions within the scope of the inspection.

Within the scope of the inspection, the Government Inspectorate only examined a number of transactions using funds raised from corporate bond issuance. The inspection showed that a number of credit institutions used funds raised from corporate bond issuance for purposes other than those stated in the issuance plan; many credit institutions did not fulfill their responsibilities in managing capital from corporate bond issuance as prescribed.

At ACB, this bank uses the proceeds from the issuance of bonds coded TPACB2018/10Y (issue date: December 19, 2018, issuance value: VND 2,200 billion) and bonds coded ACB.2019.04 (issue date: December 6, 2019, issuance value: VND 1,500 billion) to lend medium, long and short term while in the issuance plan approved by ACB's Board of Directors, the purpose of issuing the bonds is to "serve the need for medium and long term credit".

The detailed appendix of the Government Inspectorate shows that the bond code TPACB2018/10Y: The purpose of issuance according to Decision No. 4431/TCQD-HĐQT.18 dated December 13, 2018 of the Board of Directors of ACB is to "Increase the scale of the bank's operating capital to serve the need for medium and long-term credit".

At VPBank, this bank used a total of VND 1,260 billion out of a total of VND 5,000 billion from 5 bond codes issued in 2021 and 2022 to lend short-term loans to customers.

At MB, this bank used the proceeds from 11 bond codes issued in 2022 with a total issuance value of VND 1,920 billion to make loans without making investments according to the issuance purpose stated in the pre-issuance information disclosures (which is "to supplement long-term Tier 2 capital according to the regulations of the State Bank, serving the needs of credit granting, investment as well as increasing the scale of the Bank's operating capital to meet the business growth target in 2022 and the following years, in accordance with the provisions of law on credit institutions").

At OCB, this bank did not develop a capital plan and use capital for the fiscal year for the issuance of corporate bonds in the period from 2016 to 2019 as prescribed in Clause 3, Article 1 of Decree No. 90/2011/ND-CP...

OCB issued corporate bonds not in accordance with the plan approved by OCB's Board of Directors under Resolution No. 04/2017/NQ-HĐQT dated January 23, 2017 and Resolution No. 22/2020/NQ-HĐQT dated May 25, 2020.

At VIB, this bank did not disclose information within the prescribed time limit with information/documents and plans for using proceeds from the issuance that did not clearly state the disbursement time.

All 5 credit institutions were concluded to have failed to fulfill their responsibility to manage capital from corporate bond issuance as prescribed in Clause 1, Article 38 of Decree No. 90/2011/ND-CP, Clause 2, Article 35 of Decree No. 163/2018/ND-CP, and Clause 2, Article 34 of Decree No. 153/2020/ND-CP.

Hoang Phuong

Source: https://doanhnghiepvn.vn/kinh-te/thanh-tra-chinh-phu-phat-hien-sai-pham-tai-ngan-hang-mb-acb-ocb-vib/20251018104320031