Vietnamese bankers to stand trial in connection with $400m fraud case

A court in Ho Chi Minh City will be hearing a case involving 46 banking execs and staff on January 8 for alleged violations of economic regulations that resulted in VND9 trillion ($400 million) going missing from the banking sector.

Ho Chi Minh City's People's Court said on Monday that Tram Be, former deputy chairman of Sacombank, and Pham Cong Danh, a former chairman of Vietnam Construction Bank (VNCB), will be among 46 defendants to stand trial.

The scheduled date of the trial highlights how Vietnam is looking to swiftly punish high-profile individuals as part of its ongoing anti-graft move. At a yet-to-be announced date also in January, Trinh Xuan Thanh, the former board chairman and general director of construction company PVC, a PetroVietnam subsidiary, will also stand trial for embezzlement and violating state regulations on economic management, causing losses of around VND3.2 trillion ($147 million) at the company. In early August, Thanh “turned himself in” after a 10-month international manhunt.

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 Communist Party’s decision-making Politburo who headed PetroVietnam from 2006 to 2011. Thang was arrested last Friday for past wrongdoings at the national oil and gas giant.

In October last year, a court convicted Danh, the former chairman of Vietnam Construction Bank, and 35 other bank employees of stealing more than $400 million, the largest sum ever siphoned out of Vietnam's scandal-hit banking sector.

Danh got 30 years in prison while his accomplices received between 22 years behind bars and three years probation.

Following an investigation, police arrested Be along with Phan Huy Khang, former Sacombank CEO, and 14 other former employees of various banks and companies in August.

Investigators found that Danh and other bankers from VNCB had secretly withdrawn money from clients' savings accounts and used the cash to secure loans from other banks or to deposit into their own accounts.

Be was found to have helped Danh borrow VND1.8 trillion from Sacombank by using his position to evade banking regulations.

He processed Danh's loan in just a day, taking an illegal deposit from VNCB as a guarantee.

Danh spent VND1.7 trillion on paying back debts at another local bank for six companies that he owned, and deposited the rest in a personal account.

In September, a court in Hanoi sentenced Danh to 14 years behind bars for his role in another a multi-million-dollar graft case that involved the scandal-hit OceanBank and PetroVietnam.

Ha Van Tham, former board chairman of OceanBank, was accused of approving a VND500 billion ($23.5 million) loan for Danh via a real estate firm without properly securing collateral in 2012. The HCMC-based company later defaulted on the loan.

Tham received a life sentence and Nguyen Xuan Son, a former chairman of PetroVietnam, was sentenced to death.