A former chairman of the People’s Committee of Vung Tau City in southern Vietnam was indicted on Sunday over alleged wrongdoings concerning a real estate project in the city during his time in office.

The investigative body of the Ministry of Public Security searched the workplace and private residence of Phan Hoa Binh, the ex-chairman, yesterday.

Binh’s indictment was linked to a ‘ghost’ trade center and luxury apartment project that had been given the go-ahead by the former chairman before it was found seriously violating Vietnamese laws.

Police officers also took legal proceedings against two of Binh’s subordinates Truong Van Tri, former vice chairman of the Vung Tau People’s Committee, and Nguyen Thanh Son, former head of the city’s Urban Management Division, over similar allegations.

According to case files, Binh and Tri had approved and signed a total of 40 decisions from December 17, 2010 to January 18, 2011 concerning the ‘Metropolitan’ real estate project invested by An Khang Real Estate Joint Stock Company.

The project was later found breaking a number of Vietnamese laws, including the illegal conversion of 210,000 square meters of agricultural land into housing land.

According to police, the approval of such land use conversion had resulted in the loss of VND20 billion (US$893,000) from the government budget.

The two were therefore indicted on Sunday for deliberately acting against state regulations on economic management, causing serious consequences.

Son was also charged for approving and submitting the 1:500 detailed planning of the ‘Metropolitan’ project to his superiors without referring to previously approved plans.

Megaproject or megascam?

The ‘Metropolitan’ project was initiated in January 2011, with an estimated cost of over VND13 trillion ($580 million).

Up until June 30, 2013, the investor had mobilized over VND400 billion ($9 million) worth of capital from nearly 300 homebuyers.

Only VND25 billion ($1.12 million) of this sum, however, has been used to develop the infrastructure of the project and maintain the company’s operation, and all that has taken shape in the project’s area is a road running across large fields of grass dotted with some abandoned villas.

In September the same year, the investor was sued by homebuyers for failure to deliver the land in line with their agreements.

Accordingly, four of An Khang Company’s top executives were arrested in February 2014 for appropriation of property through swindling.

After thorough investigation by police, the ‘megaproject’ was found lacking all relevant papers but the approved planning signed by then-Vung Tau Chairman Binh.

Victims of the swindle said they had had complete confidence in the project due to the green light given by the official.

Meanwhile, one of the defendants, Tri, attributed his foul to work pressure, saying he was left with an immense number of papers to sign from his predecessor when he took over the office.

“I just signed what were submitted to me,” Tri said, adding that he “had no personal interests” in the act.