The case of appropriation in DongA Bank start hearing trial

Tran Phuong Binh and Phan Van Anh Vu appearing at the trial starting today (Photo: tuoitre.vn)

The defendants, who number around two dozen, include:

• Tran Phuong Binh (59), former general director cum vice chairman of the DAB management board;
• Nguyen Thi Kim Xuyen (60), former deputy general director cum member of the DAB management board;
• Phan Van Anh Vu (43), also known as Vu “Nhom,” former chairman of Bac Nam Construction 79 JSC;
• Pham Van Phuoc (56), former director of VN Food 1 Nam Dinh JSC;

In addition to DongA Bank as the civil litigant, the court also summoned 332 companies and individuals to testify. These include the State Bank of Vietnam (SBV), DongA Capital Fund, Phu Nhuan Jewelry JSC (PNJ), Bac Nam Construction 79 JSC, Viet Wealth Fund Management JSC (VFW), Cao Thi Ngoc Dung (general director of PNJ, wife of defendant Tran Phuong Binh), and other high-profile people.

According to the initial investigation, since its establishement in 1992, DongA Bank revised its business registration certificate 39 times to increase its charter capital to VND5 trillion ($217.4 million), 10.24 per cent of which was held by Tran Phuong Binh and his family, 7.7 per cent by PNJ, 12.73 per cent by Bac Nam 79 JSC, and 12.79 per cent by the Ho Chi Minh City Party Committee Office. Tran Phuong Binh was the legal representative of the bank between March 1998 and August 2015.

While inspecting DAB’s operations, SBV detected numerous violations, for example, the amassing of VND20.233 trillion ($0.88 billion) in total loans, much of which are non-performing loans. Of this, VND7.96 trillion ($0.35 billion) is difficult to recover and VND5.6 trillion ($0.24 billion) is impossible.

On August 13, 2015 SBV issued the decision to bring DAB under special supervision due to the loss of VND2.089 trillion ($90.8 million) and 62,154 taels of gold from the headquarters treasury and VND416 billion ($18 million) from its branches. The Ministry of Public Security's investigation agency began prosecution on December 9, 2016.

Up to date, the investigation agency found evidence that Tran Phuong Binh abused his powers and position to appropriate property, violated the Law on Accounting, Law on Credit Institutions, and colluded with other staff to cause a damage of VND3.608 trillion ($156.9 million) to DAB.

Tran Phuong Binh was found to have directed the spending of VND1.16 trillion ($50.4 million) to acquire 74.2 million DAB shares, ordered VND500 billion to be exchanged into $13.9 million, and ordered Vu Nhom to buy DAB shares, as well as took VND349.6 billion ($15.2 million) for himself. He appropriated over VND2 trillion ($88 million) from DAB. Binh caused an additional damage of VND1.56 trillion ($69 million) to cover under-the-table interest payments as well as loans, gold, and foreign currency transactions.

Moreover, while Dong A Bank was in the red in 2013, Binh proposed to raise the bank’s charter capital from VND5 trillion ($220.3 million) to VND6 trillion ($264.3 million). At the end of 2013, Binh and Vu Nhom agreed that Vu would buy 60 million DAB shares for VND600 billion ($26.4 million).

Vu Nhom mortgaged his land holdings in Danang city to collect VND400 billion ($17.6 million) from Dong A Bank, then used this money to purchase DAB stocks. The remaining VND200 billion ($8.8 million) was paid by the bank as per Binh’s instructions, after which Vu signed fake documents showing that he had already repaid the sum to Dong A Bank.

Due to the unsuccessful raising of charter capital, in April 2014, Binh directed the bank to return VND600 billion ($26.4 million) to Vu Nhom. Vu declared that he would pay back the VND200 billion ($8.8 million) acquired by falsified documents to Dong A Bank when he sold the land in Danang.

Then Vu Nhom bought 50 million DAB shares from four shareholders at the price of VND500 billion ($220 million). In August 2015, Vu continued to purchase an additional 13 million DAB shares at the price of VND136 billion ($6 million), but he only paid VND46 billion ($2 million) of this.

The additional conclusion noted that the VND200 billion ($8.8 million) Vu Nhom claims to have paid Dong A Bank was fake, but the VND200 billion ($8.8 million) DAB sent to the account of Bac Nam Construction 79 JSC was real. This money was transferred illegally from DAB to Vu Nhom’s company, causing VND200 billion ($8.8 million) in damage to DAB (plus VND3.2 billion ($0.14 million) of interest).

Totally, the indictment noted that Tran Phuong Binh, Phan Van Anh Vu, and two other accomplices abused their powers and positions to appropriate VND2.057 trillion ($89.4 million) from DAB. Additionally, Tran Phuong Binh deliberately violated regulations to cause a damage of VND1.551 trillion ($67.4 million) to DAB and ordered staff to spend VND467 billion ($20.3 million) for his private purposes.