Directors caught up in former bank chairman's $800 mln scam

By Hai Duyen   July 12, 2016 | 08:27 pm GMT+7

One of Vietnam's biggest corruption cases included several individuals who helped syphon off millions.

Former chairman of the Vietnam Construction Bank (CB) Pham Cong Danh was not alone in the "super-crime" case that lost the bank $404 million. Investigators have found that 17 directors also managed to embezzle $298 million.

With the alleged support of Thien Thanh Group’s directors, Danh (51) illegally withdrew large amounts of money using counterfeit documents and deposited them in three other commercial banks. The Ministry of Public Security said it was a "deliberate act against state regulations on economic management, causing serious consequences."

directors-caught-up-in-former-bank-chairmans-800-mln-scam

Vietnam Construction Bank's former chairman and other officials will go on trial from July 19 to August 18. Photo by cbbank.vn

Pham Cong Danh , former chairman of CB’s board, requested the group’s directors to deposit VND6.63 trillion ($298 million) in three other banks then guaranteed loans for Danh’s companies using the money as collateral. 

As part of the expanded investigation, in which Pham Cong Danh was arrested in July 2014, the ministry’s investigation agency said it had issued a decision to take legal action against ex-officials from the bank. The charge is usually known as "breaching regulations on loan provision in the operations of credit institutions."

Regarding legal regulations, four members of the State Bank of Vietnam’s supervision board are alleged to have allowed Danh and his accomplices withdraw over $839 million. The bank was under special control of the SBV at that time and every transaction worth over $225,000 needed to be approved by the supervision board.

In 2012, the State Bank of Vietnam restructured Trust Bank and re-branded it as the Vietnam Construction Bank with the main focus on lending to the construction sector. It had a charter capital of $135 million and total assets of over $1.26 billion.

From December 2012 to March 2014, Danh also established a dozen affiliates under Thien Thanh Group to take out loans from the bank, using assets that had already been put down as collateral for loans from other banks.

In March 2015, the SBV acquired all CB's equity for $0 per share. “The acquisition is necessary to restore CB’s payment abilities in line with general efforts to create a healthier banking system,” former SBV Governor Nguyen Van Binh said at the time.

In the Committee’s review meeting on June 30 , Party General Secretary Nguyen Phu Trong, who is head of the Central Steering Committee for Corruption Prevention and Control said that the handling of the case must be comply with legal regulations and not be influenced by any organizations and individuals, to ensure that justice is executed.

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