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Vietnam Today

Banking tycoons on trial in HCMC

Released at: 19:38, 08/01/2018

Banking tycoons on trial in HCMC

Mr. Pham Cong Danh (3rd from right). Photo from baomoi.com

$400 million fraud case involving senior banking executives and staff underway in southern city.

by Duy Anh

The trial of 46 banking executives and staff accused of violating economic regulations that resulted in VND9 trillion ($400 million) going missing opened in Ho Chi Minh City on January 8, but the former Chairman of the State-owned bank BIDV was absent without reason despite being summoned.

Tram Be, 58, former Vice Chairman of Sacombank, and Pham Cong Danh, 52, former Chairman of the Vietnam Construction Bank (VNCB), are among those in the dock. Danh and 35 bank employees have already been convicted of stealing more than $400 million, the largest sum ever scammed out of Vietnam’s scandal-hit banking sector.

The investigation found that Danh and other bankers from VNCB secretly withdrew money from customer savings accounts and used the cash to secure loans from other banks or deposited it into their own accounts.

Danh was sentenced to 30 years in prison last October while his accomplices received between 22 years behind bars and three years probation. The latest trial will focus on the alleged fraud he committed at other banks.

Following an investigation, police arrested Be along with Phan Huy Khang, former Sacombank CEO, and 14 former employees of various banks and companies in August last year. Be was found to have helped Danh borrow VND1.8 trillion ($79 million) from Sacombank by using his position to evade banking regulations. He processed a loan application from Danh in just a day, taking an illegal deposit from VNCB as a guarantee.

Danh spent VND1.7 trillion ($74.6 million) on repaying debts at another local bank owed by six companies he owned and deposited the remainder in a personal account.

According to the court, former BIDV Chairman Tran Bac Ha was involved in a multi-million-dollar loss by VNCB at BIDV, in which Danh used VNCB’s deposits at BIDV as guarantees and repaid debts for his 12 companies, causing VND2.55 trillion ($112 million) in losses for VNCB.

Ha signed 12 decisions approving loans for the purchase of building materials for Danh’s companies, even though the decision did not mention what loan guarantees there were, and Ha himself did not directly approve the loans but transferred the entire responsibility for processing the loans to BIDV branches.

The results of the investigation so far have not been enough to determine links between Ha and Danh, because there are no documents, evidence, or testimony on who knew about the borrowing companies, which were set up and operated by Danh.

Ha was absent without reason and did not send representatives to attend the court. The court ordered that Ha and two other BIDV Deputy CEOs appear in court to clarify many issues in the case.

The banking sector and State energy giant PetroVietnam are at the center of Vietnam’s sweeping corruption crackdown that has ensnared scores of high-ranking officials, including Dinh La Thang, a former member of the Politburo, who headed PetroVietnam from 2006 to 2011.

Thang and 20 other oil executives, including runaway fugitive Trinh Xuan Thanh, are standing trial this week in Hanoi for mismanagement and embezzlement.

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