Banking tycoons on trial in HCMC over $400m fraud case

By Staff reporters   January 8, 2018 | 12:22 pm GMT+7
Banking tycoons on trial in HCMC over $400m fraud case
Tram Be, former deputy chairman of Sacombank (L) and Pham Cong Danh, a former chairman of Vietnam Construction Bank (VNCB), at the court in Ho Chi Minh City on January 1, 2018. Photo by VnExpress/Quoc Doan

The case has been described as the largest scandal ever to hit Vietnam's banking sector.

The trial of 46 banking execs and staff accused of violating economic regulations that resulted in VND9 trillion ($400 million) going missing opened in Ho Chi Minh City on Monday.

Tram Be, 58, a former deputy chairman of Sacombank, and Pham Cong Danh, 52, a former chairman of Vietnam Construction Bank (VNCB), are among those in the dock.

Danh and 35 other 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 clients' savings accounts and used the cash to secure loans from other banks, or to deposit 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 commited at other banks.

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

Former chairman of Vietnam Construction Bank Pham Cong Danh. Photo by VnExpress/Quynh Tran

Former chairman of Vietnam Construction Bank Pham Cong Danh. Photo by VnExpress/Quynh Tran

Be was found to have helped Danh borrow VND1.8 trillion 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 on paying debts at another local bank for six companies that he owned, and deposited the rest in a personal account.

The trial is expected to run until February 7.

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