(Bloomberg) -- Vietnam police arrested the chairman of builder LDG Investment JSC for allegedly deceiving customers of a residential project that was reportedly launched without necessary permits.
Nguyen Khanh Hung, chairman of LDG Investment, was held by police in Vietnam’s southern province of Dong Nai as part of an ongoing probe, according to a statement.
The arrest is the latest in a series of crackdowns on erring government officials and business executives since 2021 ordered by the nation’s Communist Party.
While the police statement didn’t specify how the company allegedly deceived clients, the Communist Party’s publication Nhan Dan reported that authorities hadn’t allocated or leased the land, they hadn’t allowed the change of land use and LDG wasn’t granted a construction permit for the project.
Three calls to the company’s headquarters in Ho Chi Minh City were unanswered.
The anti-graft campaign has rippled across the nation’s economy, leading to a dramatic slowdown in the bond market amid new regulations and a stalled real estate sector. Shares of LDG fell by the daily limit Friday after the arrest.
Read: Vietnam Quickens Criminal Probes That Rattled the Economy
The provincial police had started criminal proceedings pertaining to alleged abuse of power and position against five former and current officials, including a head of a commune, in Trang Bom district where the project is located, according to the statement. Among them, four were detained in September, state media reported citing the police’s document.
Local media also reported that the company had signed contracts to sell homes in the project to 60 clients with total value of over 132 billion dong ($5.4 million).
(Updates with details on people detained in the penultimate paragraph, and home sales numbers in the last.)
©2023 Bloomberg L.P.