Vietnam begins trial of top oil execs

High profile Vietnamese oil executives took the stand on Monday facing charges regarding millions of dollars worth of losses incurred at a subsidiary of state-owned PetroVietnam.

The two-week trial at Hanoi People’s Court will see 22 former executives of the oil giant charged with embezzlement and economic mismanagement which caused huge losses at PetroVietnam Construction Corporation (PVC).

Of the most prominent defendants, Dinh La Thang, former board chairman of PetroVietnam and once a political star, is facing 20 years in jail, while the notorious runaway Trinh Xuan Thanh, PVC’s former board chairman and general director, faces death for property embezzlement and 20 years in jail for violating state regulations on economic management.

Thang has three lawyers defending him at the trial, while Thanh has five.

Thang was board chairman of PetroVietnam between 2006 and 2011 before his political career took off as Minister of Transport in Prime Minister Nguyen Tan Dung’s cabinet, and then Party leader of Ho Chi Minh City.

He was arrested on December 8 after he was voted out of the all powerful Politburo, the Party’s decision-making body, after being fired as the top leader of Ho Chi Minh City in May.

Thang directly appointed Thanh as PVC’s general director in December 2007, before making many promotion, funding and recruitment decisions to boost Thanh’s power and facilitate the company’s operations, investigators said.

He was found responsible for Thanh’s actions at PVC that led to losses worth more than VND119 billion ($5.24 million) at Thai Binh 2 thermal power plant project and embezzlement of VND4 billion ($176,000) at Vung Ang-Quang Trach project.

Last week, Thanh's family returned VND2 billion ($87,800) of the money he is accused of stealing from the state-owned oil giant, his lawyer said.

Lawyer Le Van Thiep said Thanh’s mother had handed over the money to Hanoi’s Civil Case Enforcement Department under the Ministry of Justice ahead of his trial on Monday.

In a petition, the family said that “Thanh had agreed and requested his family to voluntarily return part of the government money that was appropriated for now.”

Lawyers say the family's actions may be aimed at helping Thanh escape the death penalty. Vietnam's revised Penal Code, effective from this month, allows those convicted of embezzlement to avoid the death sentence by returning at least 75 percent of their ill-gotten gains. 

Thanh caught media attention in June 2016, when he was a provincial deputy chairman, for driving a $230,000 Lexus with a government license plate in a country where the average annual income is around $2,200. The scandal caused uproar over the use of public money, prompting a probe into his political career and how he had been promoted.

But by that time, he had already fled to Europe. The Ministry of Public Security issued an international arrest warrant for him in September 2016. He appeared on national television in early August last year saying he had turned himself in; but police have never elaborated on how he returned to Vietnam.

Trinh Xuan Thanh (C) is led by policemen to the courtroom at Hanoi People's Courthouse on January 8, 2018. Photo by AFP

Corruption crackdown at 'all-time high'

Vietnam’s energy and banking sectors have been at the center of a sweeping corruption crackdown spearheaded by Communist Party chief Nguyen Phu Trong. At a government meeting late last year, he said Vietnam's corruption crackdown is at an "all-time high".

After the above trial, Thanh is set to stand another one for embezzlement at PVPLand, a subsidiary of PVC, for which he could also face the death sentence. 

At another high-profile trial that wrapped up after a month in September, the Hanoi court sentenced Nguyen Xuan Son, another former board chairman of PetroVietnam, to death, and Ha Van Tham, his counterpart at OceanBank, to life in jail for embezzlement and mismanagement that caused losses of nearly VND1.6 trillion ($70.4 million) at the bank, in which PetroVietnam held a 20 percent stake.

Son is also among the former oil executives who are standing trial with Thanh and Thang. Meanwhile, Thang is set to stand trial later this month for his role in the OceanBank case, for which he is facing up to 20 years in prison. 

The death penalty handed down to Son and the life sentence for Tham has sent a powerful message to the general public that the current leadership is serious about its anti-corruption drive, Carl Thayer, an Australia-based veteran Vietnam analyst, said.

"Harsh prison sentences and even the death penalty will only have a marginal impact on curbing grand corruption,” Thayer said. “Resorting to hard sentences is like a medical booster shot, it wears off over time.”