Court summons record 700 to testify at Oceanbank trial

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This morning, on August 28, the Hanoi People’s Court has resumed the trial of leaders and employees of Ocean Commercial One Member Limited Liability Bank (Oceanbank).

The case was opened in March 2017 and proved inconclusive as the jury returned records and asked for clarification on several issues. After prompt investigation, the investigating police agency (the Ministry of Public Security) has issued the investigation conclusions, followed by the Supreme People’s Procuracy issuing indictments against former chairman Ha Van Tham and accomplices.

Four more individuals were put on trial since then, including Hua Thi Phan (former chairman of Phu My Development Investment JSC), Pham Cong Danh (former chairman of Thien Thanh Group Co., Ltd.), Hoang Thi Hong Tu (former chairman of BIDV Securities JSC, or BSC Vietnam), and Tran Van Binh (former CEO of Trung Dung Trading and Production Co., Ltd.). The total number of defendants in this trial was 51.

Additionallty, Nguyen Xuan Son (former general director of Oceanbank) was charged with embezzlement. According to Article 278 of the Vietnamese Criminal Code, the embezzlement of more than VND500 million ($21,995) is punishable by imprisonment from 20 years to life or even by death.

In the end of 2008, Vietnam Oil and Gas Group (PetroVietnam) became a strategic partner of Oceanbank, committing 20 per cent of charter capital. PetroVietnam introduced Nguyen Xuan Son as board member and general director of Oceanbank, as well as the representative of PetroVietnam’s capital in Oceanbank.

Son asked Ha Van Tham to “care for customers” and pay interest rate outside of deposit contracts to PetroVietnam and other member units.

To fund these payments, Ha Van Tham used BSC Vietnam which he created (with Hoang Thi Hong Tu as chairman of the board) to collect consultation fees after loans. Customers borrowing capital or buying foreign currency had to sign a consultancy contract and pay a consultation fee, which was spent on “customer care” requested by Nguyen Xuan Son.

From 2010 to November 31, 2014, Ha Van Tham paid VND1.57 trillion ($69.06 million) as extra-contractual interest, VND246 billion ($10.82 million) of which went to Nguyen Xuan Son. The new indictment determined the amount that Son embezzled to be over VND49 billion ($2.15 million), calculated according to PetroVietnam’s 20 per cent capital contribution to Oceanbank.

Ha Van Tham, former chairman of Oceanbank

According to the indictment, more than 51,000 individuals and 392 organisations have been receiving higher interest than specified in their contracts. However, so far only 19 organisations have admitted to this and returned the extra amount, totalling up to VND3 billion ($131,970), the rest either adamantly deny the existence of such payments or refuse to answer queries.

A portion of these extra interests was paid through different branches of the bank. 34 defendants who were former managers of Oceanbank’s branches or transaction offices were charged with deliberate violation of government regulations on economic management, drawing severe consequences.

Aside from the above-mentioned defendants, there are 227 more defendants who were transaction offices directors and are charged with causing damage below VND1 billion ($43,990) and many defendants who were branch deputy-directors and employees causing damage of more than VND100 million ($4,399).

Against these defendants the investigation agency and Procuracy decided not to pursue criminal charges and only require administrative sanctions and partial compensation for damages since the complete handling of these units might cripple Oceanbank during the restructuring process.

The review and evaluation of bad debts at Oceanbank to uncover violations also revealed several eight clients with total outstanding loans up to VND2.65 trillion ($116.57 million) in bad debts. These include TNN Real Estate Co., Ltd., BSC Vietnam JSC, Lien Viet Finance Investment and Consultant JSC, Vina Megastar Corporation JSC, Nam Dinh JSC, Chi Linh Star Golf & Country Club, Toan Viet Investment JSC, and Housing Exchange Construction Investment Consultancy JSC.

This trial is expected to last 20 days, with a record number of more than 700 people summoned to participate in the proceedings.