Ex Vietnam central bank leader stands trial in massive graft case

The People’s Court of Ho Chi Minh City is trying Dang Thanh Binh, former deputy governor of the State Bank of Vietnam and four other former senior staff for their involvement in a case that caused the banking sector to lose VND15 trillion ($655 million) in 2013.

Binh, 64, is charged with "negligence of responsibility, causing serious consequences." He served as deputy governor of the State Bank of Vietnam from 2005 until he retired in August 2014.

Investigators from the Ministry of Public Security earlier said Binh was accountable for massive losses at Vietnam Construction Bank (VNCB), the biggest ever fraud case to rock the country's banking sector.

According to the indictment, Binh was assigned by the central bank to restructure several weak banks, including VNCB, which is now the Construction Bank. In August, 2012, he signed a central bank proposal to restructure VNCB that was approved by the government.

However, Binh later let a series of frauds involving hundreds of millions of dollars occur at VNCB.

Dang Thanh Binh, former deputy governor of the State Bank of Vietnam, appears at the court in Ho Chi Minh City on June 25.Photo by VnExpress/Ngoc Lan

In September 2016, a court convicted Pham Cong Danh, 52, former chairman of VNCB, and 35 other bank employees of stealing more than VND9 trillion ($400 million), the largest sum ever scammed in Vietnam's 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 deposit into their own accounts. Danh was sentenced to 30 years in jail in October, 2016, while 35 other former bank employees received up to 22 years behind bars.

Investigators say they now have enough evidence to conclude that Binh did not fulfill his responsibilities as a deputy governor and did not follow the plan to restructure VNCB as approved.

Binh is also accused of not following directions from the Prime Minister in appraising the ability of Danh. The PM had asked the central bank to evaluate Danh and see if he was qualified for the position. Instead, the indictment alleges that Binh allowed Danh to continue deepen his management work at VNCB, creating further opportunities for him to commit fraud.

The trial of Binh and his four former subordinates will last until June 29. Based on the indictment, he could be sentenced to 3-12 years in jail if found guilty.