Former PVEP officials prosecuted for taking under-the-table interest

Former PVEP general director Do Van Khanh is one of the defendants

The Supreme People’s Procuracy has just announced the initiation of proceedings against:

· Do Van Khanh (1961), former general director of PVEP;

· Vu Thi Ngoc Lan (1973), former deputy general director of PVEP;

· Nguyen Tuan Hung (1971), former head of the Finance Division.

They are charged with “abusing position and/or power for appropriation of property” for receiving nearly VND52 billion ($2.26 million) under-the-table interest from OceanBank.

Complying with directions from PetroVietnam to prioritise the financial services of OceanBank, PVEP mobilised money to deposit at OceanBank's Thang Long branch.

Do Van Khanh assigned Vu Thi Ngoc Lan, who was in charge of the Finance Division, to sign deposit contracts and deposit extension contracts with OceanBank, while Nguyen Tuan Hung was the person who personally composed and submitted the deposit contracts to Vu Thi Ngoc Lan.

Therefore, PVEP signed and extended 793 term deposit contracts at OceanBank with the annual interest rate of 5.5-14 per cent. PVEP also opened a payment account at Oceanbank's Thang Long branch with the annual interest rate of 0.1-2.4 per cent.

During the investigation, former head of PVEP's Finance Division Nguyen Tuan Hung confirmed receiving a total of over VND39.2 billion ($1.7 million) in under-the-table interest from OceanBank. He gave Do Van Khanh VND8.1 billion ($352,200) and $150,000, Vu Ngoc Lan VND10 billion ($434,800) and $500,000, and other amounts to some other leaders of PVEP.

However, Do Van Khanh and Vu Ngoc Lan denied Hung’s testimony and the investigation agency found that Hung received VND52 billion ($2.26 million) from OceanBank instead of the VND39.2 billion ($1.7 million) he claimed. The agency will continue investigating PVEP’s other officers.

In other cases, the Ministry of Public Security's investigation agency has just asked PetroVietnam (Vietnam Oil and Gas Group) to submit all documents related to PVEP's Junin 2 heavy oil extraction project in Venezuela for inspection.

Junin 2 is the billion-dollar project that PVEP (on behalf of PetroVietnam) and state-owned Petroleos de Venezuela (PDVSA) contributer 40-60 per cent of the capital to exploit heavy oil at Junin 2 in the Orinoco Belt which holds the world's largest crude oil reserves. Although the co-operation agreement was signed in 2010 and PVEP gave $442 million to the Venezelan side, the project has yet to be put in operation. In 2013, the prime minister ordered PVEP to stop investment in the project.