Former chief of Vietnam’s fuel giant under probe as corruption crackdown escalates

A criminal investigation has been formally launched into a former general director of state-owned oil giant PetroVietnam, as Vietnam's corruption crackdown in the energy sector intensifies.

Phung Dinh Thuc, 63, has been put under house arrest and is facing charges of “deliberately acting against the State’s regulations on economic management, causing serious consequences.” Prosecutors still need to finalize the charges.

Thuc served as PetroVietnam’s general director between 2008 and 2010, and as its chairman from 2011 to 2014.

An investigation found he had violated financial regulations on several loss-making projects, including a thermal power plant, a textile plant and several biofuel projects.

He was also held responsible for the promotion of two executives who have been caught up in serious legal turmoil, Trinh Xuan Thanh and Nguyen Xuan Son.

Thanh was CEO and chairman of PetroVietnam Construction Corporation from 2007 before he was appointed as a chief representative at the trade ministry in 2013. He reportedly turned himself in last summer after fleeing to Europe and is set to stand trial next month for causing losses of around VND3.2 trillion ($147 million) at the construction unit.

Son, who rose from deputy general director to board chairman of PetroVietnam (PVN) in 2014, was sentenced to death last December for a multi-million-dollar graft case at OceanBank, in which the fuel giant held a 20 percent stake.

PetroVietnam and the banking sector have been at the heart of Vietnam’s sweeping corruption crackdown, which has been spearheaded by Communist Party chief Nguyen Phu Trong and has netted scores of officials.

More than 20 leaders and former leaders at PVN have been investigated. The biggest head to roll so far is Dinh La Thang, a former board chairman who was sacked from his post as the Party leader of Ho Chi Minh City in May.

Most recently, former board member Phan Dinh Duc was charged over allegations of mismanagement linked to investment losses in the scandal-hit OceanBank, which was taken over by the central bank in 2015.