Court returns documents of VNCB case for further investigation

Defendants Pham Cong Danh (left) and Tram Be (right) at the court

This morning, the trial panel of the first instance hearing returned the documents and requested additional investigation on the case of “intentionally violating state regulations on economic management and causing serious consequences” at Vietnam Construction Bank (VNCB).

Earlier, the Procuracy proposed a sentence of 20 years of imprisonment for Pham Cong Danh in combination with the first phase sentence—altogether 30 years of imprisonment—and 5-6 years of imprisonment for Tram Be.

According to the proposal of the procuracy, during his time in office at VNCB, Pham Cong Danh asked Phan Thanh Mai, former general director of VNCB, and other subordinates to borrow VND6.126 trillion ($270 million) from Sacombank, BIDV, and TPBank to pay salary for staff, do business, and raise charter capital.

The investigation’s outcomes indicate that all of the above procedures were cover-ups of money transfers to Danh. At the headquarters of Sacombank, he directly met Tram Be and Phan Huy Khang (former general director of Sacombank) to ask for loans which were guaranteed by VNCB’s deposits at the banks. At the other banks, Danh did not meet the leaders directly but used others to work with bank officers.

The companies Danh established to borrow the money, after long delays, defaulted on these loans and Sacombank, BIDV, and TPBank recovered the debt by seizing VNCB's deposits they held. As a result, VNCB lost over VND6.1 trillion ($270 million).

Tram Be is accused of helping Danh to withdraw VND1.8 trillion ($79.3 million) of this amount. The group of defendants previously working for BIDV are charged with indirectly causing VND2.550 trillion ($112.3 million) in damages to VNCB. The remaining amount was caused by the group defendants previously working for TPBank.

Moreover, during Danh’s time at VNCB, he and other defendants committed many violations and caused damages of VND9 trillion ($396.5 million) to the bank. On January 24, 2017, the Ho Chi Minh City’s People’s High Court sentenced Pham Cong Danh to 30 years of imprisonment and asked him to compensate for the loss.

After a month of trial, today the trial panel requested additional investigation of six issues. These included the relationship between Pham Cong Danh (former chairman of VNCB's Board of Directors) and other defendants who are former officers of BIDV and TPBank, violations in the credit procedures, the usage of the VND6.126 trillion ($270 million).

The court also required to clarify where VND4.5 trillion ($198.24 million) is. This amount was proposed to be added to VNCB's charter capital, but the State Bank of Vietnam did not provide approval. According to the court, this amount was given back to VNCB. The court held that it is necessary to define the damages caused to VNCB before a case can be brought.

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