As many as three dozen defendants appeared in a Ho Chi Minh City court on Tuesday for involvement in a high-profile case causing the loss of more than VND9 trillion (US$401.79 million) from the state budget.
The man who bears the main responsibility for the massive loss at the erstwhile Vietnam Construction Joint Stock Commercial Bank (VNCB) is Pham Cong Danh, 51, the lender’s former chairman.
Danh was arrested in July 2014, and the VNCB is now known as the Construction Bank, after the State Bank of Vietnam intervenedto bail it out following the scandal caused by Danh.
The trial is expected to run for a month until August 18, as the VNCB case is considered one with the largest-ever financial damages in Vietnam. In 2014, Huynh Thi Huyen Nhu, an ex-official of state-run VietinBank, was sentenced to life imprisonment for a VND4 trillion ($178.5 million) fraud.
In addition to the huge number of defendants, the court is also attended by 45 lawyers, four of whom will defend Danh alone, and 156 people involved are also expected to appear.
The people involved even include representatives from the State Bank of Vietnam and other lenders such as VietinBank, Agribank, ACB, MB, Kien Long Bank, Vietcombank and BIDV.
Members of the price assessment panels from Ho Chi Minh City, Da Nang, Ba Ria-Vung Tau, Binh Duong, Quang Nam and Quang Ngai have also been summoned to the court.
Despite this, many of those summoned did not come to Tuesday’s session.
Pham Cong Danh at court
VND9 trillion losses in 2 years
According to court documents, prior to his arrest, Danh was the chairman of Thien Thanh Group, a construction and real estate corporation in Vietnam.
In late 2012, Danh decided to acquire TrustBank to restructure the loss-ridden lender, and later renamed it VNCB.
However, under the management of Danh, the VNCB incurred massive losses, with the chairman eventually charged with “deliberately acting against state regulations on economic management, causing serious consequences.”
From February 2013 to July 2014, Danh steered the VNCB towards debts of VND38.25 trillion ($1.71 billion), while its total assets were then only valued at VND16.74 trillion ($747.32 million).
Danh is accused of cooking the books in a software system upgrade project to withdraw VND63.2 billion ($2.82 million) from the VNCB budget, and later drew another VND581 billion ($25.94 million) to cover nonexistent office leasing contracts.
Danh then ordered three top VNCB executives, who are now defendants, to issue VND900 billion ($40.18 million) worth of bonds to three companies, with all the money going straight into his pocket.
Moreover, Danh also withdrew VND5.49 trillion ($245.09 million) in savings from a group of depositors led by Tran Ngoc Bich without her signature. This resulted in another massive loss for VNCB.
An office of the erstwhile VNCB
In November 2015, Danh and 15 accomplices, who were all VNCB employees and executives, were charged over these activities that led to serious economic consequences for the state.
Moreover, Danh and his accomplices were also later charged for numerous credit and financial violations.
Danh signed a nonexistent construction material purchase contract worth VND5 trillion ($223.21 million) with Nguyen Thi Nhu Loan, chairwoman of the Quoc Cuong Gia Lai realty group.
He then used this bogus contract to withdraw VND4.7 trillion ($209.82 million) in cash to repay his own debts, with VNCB failing to retrieve VND2.09 trillion ($93.3 million) out of the VND5 trillion loan.
The losses Danh and the other defendants incurred on the VNCB totaled more than VND9 trillion between 2012 and 2014, according to court documents.