Former energy exec gets death sentence in Vietnam's massive graft trial

A court in Hanoi sentenced a former chairman of state fuel giant PetroVietnam to death and his counterpart at OceanBank to life imprisonment on Friday for their roles in a multi-million-dollar graft case that has riveted the nation.

Nguyen Xuan Son, who served as chairman of the board at the oil and gas group from 2014 until his arrest in 2015, received the death penalty for appropriating VND246 billion ($13.6 million) from the bank.

PetroVietnam had bought a 20 percent stake in OceanBank, which meant Son had stolen VND49 billion in government money, prosecutors said. The 55-year-old was charged with embezzlement, abuse of power and deliberately violating state regulations on economic management.

Ha Van Tham, former chairman of the board at OceanBank, was sentenced to life in jail on charges of embezzlement, deliberately violating state regulations on economic management and breaking regulations on lending activities at credit institutions.

Tham is accused of offering deposit rates above those set by the central bank to various customers including PetroVietnam between 2010 and 2014, causing losses of nearly VND1.6 trillion ($70.4 million).

Although the defendants said that the excessive interest rates were just a business strategy aimed at saving the bank and actually resulted in a healthy profit, the indictment said the crime “seriously affected the monetary market.”

Other bankers received up to 22 years in jail.

Tham, a U.S.-educated banker who was Vietnam’s eighth richest man in 2013 based on stock holdings, had won several national awards for outstanding entrepreneurship before his arrest in October 2014.

He is also accused of approving a VND500 billion ($23.5 million) loan for Pham Cong Danh, former chairman of Vietnam Construction Bank, via a real estate firm without properly securing collateral in 2012. The Ho Chi Minh City-based company later defaulted on the loan.

Danh was sentenced to 14 years. He is already serving a 30-year jail term after being found guilty last year of illegally withdrawing more than VND9 trillion ($404 million) from the bank.

On Monday, in his closing statement, Tham asked the judges to be lenient with his employees.

“You used to sit with me on a boat when I was captain. I fell and many of you had to fall with me,” Tham said, addressing his former employees who account for a large number of the defendants. 

“I am sorry for implicating you in this,” he said.

Also on that day, Son called the death penalty proposed against him "an unjust verdict." Reuters on Friday quoted his lawyer, Le Minh Tam, as saying that he would appeal against the verdict.

OceanBank was founded in 1993 with a 20 percent stake from the Ocean Group, which also invests in hospitality, securities, media and retail. It was taken over by the central bank in April 2015 after the scandal broke out.

The high-profile trial, with 51 bankers and businessmen in the dock, lasted a month, and the heaviest sentences followed the recommendations made by the country’s top prosecutors two weeks earlier.

It could go down as the biggest fraud trial in Vietnam’s history.

The Ministry of Public Security has launched a separate investigation into who else benefited from the illegal money.

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 state-owned units besides PetroVietnam. But only 19 businesses have admitted to having received a combined VND3 billion, while 124 denied taking any money and the rest remained silent.

At least three PetroVietnam units were put under investigation earlier this month for colluding with OceanBank execs to appropriate $5.2 million.

PetroVietnam and the banking sector 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 Communist Party’s decision-making Politburo who headed PetroVietnam from 2005 to 2011.

The country’s Party chief Nguyen Phu Trong, who is spearheading the country’s anti-corruption campaign, said in July that the fight against corruption is no longer being handled slowly or on a case-by case basis.

“It has become a movement,” he said.