Big questions remain unanswered as Vietnam’s massive graft trial nears verdicts

By Bao Ha   September 26, 2017 | 03:34 pm GMT+7
Big questions remain unanswered as Vietnam’s massive graft trial nears verdicts
People pass a branch of OceanBank at the PetroVietnam's building in Hanoi. Photo by Reuters/Kham

The main accusation is that OceanBank paid excessive deposit interest rates, but former employees claim the strategy actually made a profit.

The infamous multi-million-dollar OceanBank trial will reach a verdict on Friday, but most defendants still refute the charges. For example, were there really losses?

Ha Van Tham, former chairman of the scandal-hit bank, and 44 other bankers are accused of offering deposit rates above those set by the central bank to various customers, causing losses of nearly VND1.6 trillion ($70.4 million).

They were charged with “deliberately acting against state regulations on economic management, causing serious consequences”, which is punishable by up to 20 years in jail.

But the most repeated question raised by the defendants and their lawyers during the 20-day trial was whether the extra interest payments had actually damaged the bank.

“There was no damage,” Tham said in court. “I was a big shareholder in OceanBank. Why would I want to damage myself?”

Le Thi Thu Thuy, former CEO of the bank, said without the high interest, the bank would have been unable to attract deposits or loans or create jobs for 3,000 employees.

The defendants said that the excessive interest rates were aimed at saving the bank and actually resulted in a healthy profit, amounting to nearly VND2 trillion ($88 million), according to Tham.

Defense lawyers spent days questioning the loss-making accusations, but prosecutors refused to budge on their indictment.

Top prosecutors have called for Tham to be sentenced to life imprisonment as he is also charged with embezzlement, abuse of power and breaking regulations on lending activities at credit institutions.

Nguyen Xuan Son, former board chairman of energy giant PetroVietnam (PVN), which was among the companies to enjoy the special deposit interest rates, is facing death for appropriating VND246 billion ($13.6 million). During his time in charge, the state-owned fuel firm held a 20 percent stake in the bank, which meant Son had embezzled VND49 billion in government money, prosecutors said.

Son has been contesting the accusation, saying that he only received special interest on behalf of PVN, and there was no evidence to show that he stole any money from anyone.

Who took how much?

According to the indictment, more than 50,000 individuals and nearly 400 organizations and businesses received preferential deposit interest payments from the bank, including many PVN units and state-owned shipbuilding giant Vinashin.

But only 19 businesses admitted to having received a combined VND3 billion; 124 denied taking any money and the rest remained silent.

The Ministry of Public Security has launched a separate investigation into the matter, and at least three PetroVietnam units were put under probe earlier this month for colluding with OceanBank execs to appropriate $5.2 million.

The OceanBank trial opened in Hanoi on August 28 and could go down as the biggest in Vietnam’s history, with around 750 attendants including 51 bankers and businessmen in the dock.

The hearing closed on Sunday and the judges are taking a five-day break before announcing the verdicts on Friday.

OceanBank was founded in 1993 with a 20 percent stake from Ocean Group, which also invests in hospitality, securities, media and retail.

It was taken over by the central bank following the scandal in 2015, and major lender VietinBank was put in charge. The bank’s new chairman said in a statement posted on its website in January that its operation had been “profitable” over the past two years.

 
 
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