Ten accused, including six former chief officials of the debt-stricken shipping company Vinalines, have been charged with “intentionally violating state regulations on economic management, causing serious consequences,” investigators under the Ministry of Public Security have ruled.

Four of the accused Vinalines officials, including Duong Chi Dung, former Vinalines chairman and who was captured on a wanted warrant in September 2012, have also been indicted for “embezzling assets.”

They have caused a total economic loss of VND366 billion (US$17.26 million) to the state budget and embezzled $1.66 million, according to officers who said this is one of the most complex cases they have ever been tasked with.

Going against Prime Minister’s order

According to investigators, in 2006, Pham Duy Anh, who was Vinalines chairman at that time, signed a resolution to assign the company CEO to establish a ship repairing plant in a southern province.

On August 31, 2006, the Government Office released a document signed by Deputy Prime Minister Nguyen Sinh Hung saying the “government agreed in principle to Vinalines’ plan to set up a southern ship repairing plant,” and the proposal “will be determined by the Prime Minister”.

However, on June 27, 2007, the company’s new chairman, Duong Chi Dung, signed a decision to approve the plan to set up the plant in the coastal province of Ba Ria – Vung Tau at a total cost of VND3.85 trillion ($181.6 million) without waiting for the directive from the Prime Minister.

In late 2007, Dung approved the plan to purchase the 83M floating dock, which was built in 1965, at $9 million.

On October 3, 2008, Dung officially approved the plan, proposed by CEO Mai Van Phuc by which time the plan’s total investment had been increased to VND6.48 billion.

Investigators said Vinalines had bought the 83M floating dock before the ship repairing plant project was approved, and thus had no place to install and utilize the equipment. Consequently, Vinalines had to dock the floating dock at Go Dau Port in Dong Nai, which resulted in huge expenses for port leasing, bank loan interest, and repairing costs.

By approving the customs clearance for Vinalines to bring the floating dock to Vietnam, the four accused customs officers have caused a financial damage worth VND82 billion to the state budget, according to investigators.

Embezzling $1.66 million

The investigators said the Vinalines officials had known that the 83M floating dock was too old to meet import standards but still signed the buying contract.

Remarkably, even though the seller, Nakhodka Co, only asked for a price of under $5 million, the accused officials decided to buy the floating dock via a brokerage, the Singapore-based AP Co, at $9 million.

AP later transferred $1.66 million to the accused, via the bank account of the Phu Ha Co Ltd, whose director is Tran Thi Hai Ha, the younger sister of Tran Hai Son, former CEO of the Vinalines Shipyard Co Ltd.

Upon receiving the money, Son gave Dung and Phuc VND10 billion each. Son took VND6 billion himself and gave Ha VND2 billion, and Tran Huu Chieu, Vinalines former deputy CEO, VND340 million.

Investigators said Ha did not know her brother had taken advantage of her account to get the embezzled money. She also returned the money to the investigators, and was thus not charged under “embezzling asset”.

Dung also had a house and two apartments in Hanoi distrained by investigators. He was found to have given money to P.T.Th, who had an illegitimate child with him, to buy the two apartments.

The house of Phuc in Quang Ninh was also distrained.