Vietnamese prosecutors have brought charges against a former State Bank of Vietnam deputy governor for his dereliction of duty in overseeing a loss-making commercial bank, resulting in hefty losses for the lender.

Dang Thanh Binh, deputy governor of the central bank from 2005 until his retirement in 2014, was charged for negligence that resulted in a series of high-profile scandals and massive losses at the erstwhile TrustBank.

The charge was filed by the People’s Supreme Procuracy on Thursday, according to a source close to Tuoi Tre (Youth) newspaper.

In 2012 TrustBank was sold to a group of investors led by Pham Cong Danh who rebranded it as the Vietnam Construction Joint Stock Commercial Bank (VNCB).

However, under his leadership, VNCB suffered losses of more than VND9 trillion (US$402 million), forcing a bailout by the State Bank of Vietnam.

Danh was sentenced in 2016 to 30 years behind bars for his role in the VNCB scandal and the bank was again rebranded, this time as Construction Bank.

Ex-chairman of VNCB Pham Cong Danh is seen at a court in this 2016 file photo. Photo: Tuoi Tre

According to the indictment, ex-deputy governor Binh took charge of the central bank’s legislative department, whose primary responsibility was helping the governor implement a restructuring plan for six weak lenders, including VNCB.

In August 2012, Binh signed and submitted a restructuring plan for VNCB to the government and received in-principle approval for the proposal.

Binh suggested in the proposition that VNCB be classified as a weak credit institution so that the transfer of its stake from a group of old shareholders to the investment group led by Danh would have to be thoroughly investigated beforehand.

Binh also signed a decision to form a ‘supervision panel’ for VNCB, but eventually acted against his own proposal by applying no scrutiny to Danh and his fellow shareholders, enabling them to take over VNCB with ease and use the bank as a means for several economic crimes.

As of July 2014, when legal proceedings were launched against Danh and his accomplices, VNCB held negative equity of VND18 trillion ($792.95 million), fourfold the number before the restructuring, complete with debts totaling more than VND38 trillion ($1.67 billion).

Binh is responsible for failing to oversee the fraudulent transactions undertaken by Danh and his accomplices that caused the $402 million losses for VNCB.

Four additional members of Binh’s ‘supervision panel’ were levied similar charges on Thursday for their partial roles in the case.

An transaction office of the erstwhile VNCB is seen in this file photo. Photo: Tuoi Tre

Following his trial in 2016, Danh and 44 other defendants appeared at a second trial in January 2018 for their roles in causing losses of more than $264 million for local lender Sacombank.

The 53-year-old ex-chairman was tried on charges of “deliberately acting against state regulations on economic management, with serious consequences” for causing a further VND6 trillion ($264.32 million) loss for VNCB.

The court initially expected the trial to last a month, but chose to give a postponement after five days for prosecutors to complete the case file.