Former CEO of Jetstar Pacific Airlines, Luong Hoai Nam arrested

Jan 10, 2010, 12:54

Jetstar Pacific is 27 percent owned by Sydney-based Qantas Airways Ltd.Luong Hoai Nam, the former chief executive officer of Jetstar Pacific, has been detained by Vietnamese authorities, Olivia Wirth, a Qantas spokeswoman, said by e-mail.

By Beth Thomas

Jan. 8 (Bloomberg) -- Two Australians were barred from leaving Vietnam amid a probe into the operations of Jetstar Pacific Airlines Joint-Stock Aviation Co. in the Southeast Asian nation, according to Australia’s government.

The Australians are Jetstar Pacific Chief Financial Officer Tristan Freeman and Chief Operating Officer Daniela Marsilli, said Simon Westaway, a spokesman for Melbourne-based Jetstar, said in an e-mail today. The Australian Embassy in Hanoi is seeking further details as to why the Vietnamese government has prevented them from leaving, the Department of Foreign Affairs and Trade in Canberra said in an e-mailed statement.

Jetstar Pacific is 27 percent owned by Sydney-based Qantas Airways Ltd.Luong Hoai Nam, the former chief executive officer of Jetstar Pacific, has been detained by Vietnamese authorities, Olivia Wirth, a Qantas spokeswoman, said by e-mail.

Vietnam’s Ministry of Public Security has arrested and charged Nam following “serious losses” discovered by the state auditor at Jetstar Pacific, according to a faxed statement from the Foreign Ministry in Hanoi today.

Nam’s arrest was in connection with a $31 million loss caused by jet-fuel hedging at the airline from July 2008 to May 2009, the Tuoi Tre newspaper reported today, citing the audit. Nam, who left the position of CEO in November, owns a stake of less than 1 percent in Jetstar Pacific, according to Wirth.

Vietnamese Investigation

The Vietnamese authorities are conducting an inquiry into the responsibilities of Jetstar Pacific’s management and executive board, the foreign ministry said. Since Freeman and Marsilli are members of the board, they have to be present in Vietnam for the investigation, according to the statement.

Vietnam’s State Capital Investment Corp., the government’s investment arm, owns the majority of the carrier, which competes with state-owned Vietnam Airlines Corp.

Sydney-based Qantas has the right to increase its holding in the airline to 30 percent this year, Wirth said. It first acquired an 18 percent holding in July 2007. Jetstar Pacific, which became profitable in June 2009, has six aircraft serving seven destinations within Vietnam.

Source: Bloomberg