Court postpones sentencing in Vietnam's largest banking scandal, demands further probe

A high-profile trial involving multi-million dollar losses in the banking sector was put on hold by a court in Ho Chi Minh City on Wednesday due to a lack of evidence or a strong enough argument to press charges against 46 banking executives and staff.

The city's People's Court returned the case to prosecutors on what was supposed to be the verdict day of the one-month trial. It said that further investigation is needed to prosecute the suspects accurately.

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

They were accused of “deliberately violating state regulations on economic management, causing serious consequences.”

Danh is alleged to have used more than VND6.1 trillion ($270 million) from VNCB to secure loans from local banks Sacombank, BIDV and TPBank, which then legally seized the money when the loans defaulted.

The trial in Ho Chi Minh City is the second to look into Danh's wrongdoings and is focusing on the alleged fraud he committed at other banks.

According to the indictment, Danh and other bankers from VNCB secretly withdrew money from clients' savings accounts and used the cash to secure loans from other banks, pay off debts or deposit into their own accounts.

Out of the money stolen from VNCB, Danh used VND6.1 trillion to secure loans from Sacombank, BIDV and TPBank for his ghost companies. As these companies were unable to pay off the loans, the three banks seized the money, which prosecutors say should be considered a loss for VNCB.

Prosecutors have proposed a 20-year sentence for Danh. However, as he has already been sentenced to 30 years in prison (the maximum allowed by Vietnam's Penal Code) for stealing over VND9 trillion from VNCB at a trial in September, his combined sentence would still be 30 years.

The proposed sentence for Be is 5-6 years in prison. Be has been charged with abusing his position to evade banking regulations in order to help Danh borrow VND1.8 trillion from Sacombank.

Of this money, 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.

In court, staff from BIDV and Sacombank said they did not know Danh and had no idea about the ghost companies he had set up or the purpose of the loans. Their lawyer therefore argued that what they had done was a mistake and did not “deliberately violate state regulations”.

"The judicial panel should have more time to sleep carefully on this,” the court said.

Tram Be, a former deputy chairman of Sacombank, at the court in Ho Chi Minh City on February 7, 2018. Photo by VnExpress/Thanh Nguyen

However, Be claimed what he discussed with Danh was in line with banking regulations and that mistakes made by his staff were the reason for the issue.

He said he had approved the loans but knew nothing about what Danh planned to do with the money and therefore should not be considered an accomplice. The court also said it will have to reconsider Be's case.

The banking sector and state energy giant PetroVietnam have been 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 has been sentenced to 13 years in prison for economic management violations, while his subordinate, the runaway oil executive Trinh Xuan Thanh, received a life sentence for embezzlement.

Thanh was sentenced to life in prison for the second time on Monday for embezzlement at a subsidiary of PetroVietnam. Thang is also set to stand trial again for his role in the infamous multi-million-dollar graft case at OceanBank, for which he faces up to 20 years in prison.