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Banking & Finance

Former Ocean Bank Chairman faces prosecution

Released at: 08:19, 12/10/2016

Former Ocean Bank Chairman faces prosecution

Photo : Viet Tuan

Three-year investigation results in Chairman and 15 other senior bank officials being found to have cases to answer.

by Duy Anh

The Investigation Police Department recently announced that they have concluded a three-year investigation and have requested the Supreme People’s Procuracy prosecute former Ocean Bank Chairman Ha Van Tham.

Tham is said to be responsible for estimated losses of VND1.55 trillion ($69 million) for the bank and for the State, the Department announced on October 6. He was arrested in October 2014.

Joining Tham in the dock will be 15 former officials of Ocean Bank, including two former General Directors, Nguyen Xuan Son and Nguyen Minh Thu, two former Deputy General Directors, four Directors, a Deputy Director of a department, and six Directors of branches.

Tham is charged with breaching loan regulations for credit institutions, intentionally acting against State laws causing serious consequences, committing fraudulent acts, and abuse of power during his time at Ocean Bank.

Under his direction the Hanoi-based bank paid customers an interest rate above the standard rates applied by the State Bank of Vietnam (SBV), which cost it more than VND984 billion ($22 million).

He was found to have abused his power as the bank’s leader in withdrawing bank funds for personal use, leading to non-retrievable losses of trillions of VND, which badly affected the country’s economy and negatively influenced the implementation of the State’s fiscal and monetary policy, the police said.

Tham personally ordered Ocean Bank’s Board of Directors to approve a loan of VND500 billion ($11.1 million) to the former Chairman of the Vietnam Construction Bank (VNCB), Pham Cong Danh.

The amount was above regulated limits and the loan was pushed through without collateral assets to secure the loan. Last month Danh was sentenced to 30 years behind bars for violations that caused losses of VND9 trillion ($396 million) for VNCB.

The two former General Directors, Son and Thu, were both charged with abuse of power and intentionally acting against State laws on economic management, causing serious consequences. Police from the Ministry of Public Security (C46) arrested Son in July 2015 while Thu was arrested by police in January 2015.

Son was found to have charged additional fees to customers via one of Tham’s shell companies - the BSC Co. JSC - and pocketed some VND70 billion ($3.1 million). Pham Hoang Giang, former General Director of BSC, will also be prosecuted.

The two former Deputy General Directors, the four Directors, the Deputy Director of a bank department, and the six Directors of branches will also be tried for their involvement in a series of bank management violations from 2011 to 2014.

Forty-nine directors of Ocean Bank branches and transaction offices who followed orders and paid customers the high interest rates will be investigated later. Police will also investigate eight customers who saddled Ocean Bank with bad debts of more than VND2.6 trillion ($116.6 million) during the next stage of the investigation.

Under Tham’s direction, Ocean Bank’s bad debts climbed to nearly VND15 trillion ($672.6 million), with pre-tax losses reaching more than VND10 trillion ($448.4 million) as at March 2014.

In May 2015 the SBV officially acquired Ocean Bank, gaining all its equity, including its charter capital of some VND4 trillion ($179.3 million). The stakes were transferred at a price of VND0 per share.

The Ocean Bank case is one of the six largest economic crimes the Central Steering Anti-Corruption Committee asked to bring to trial by the first quarter of 2017 at the latest.

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