Vu Nhom and 23 accomplices to be prosecuted on four charges

Vu Nhom and Tran Phuong Binh caused billions of VND in damages to Dong A Bank

Yesterday (June 18), the Ministry of Public Security’s investigation agency concluded the case of “deliberately acting against state regulations on economic management, causing serious consequences” at Dong A Bank, which caused thousands of billions of Vietnamese dong in damages, according to vietnamnet.vn.

The agency has sent the documents to the Supreme People’s Procuracy prosecuting Phan Van Anh Vu (also known as Vu Nhom, former chairman of Bac Nam Construction 79 JSC), Tran Phuong Binh (former general director and vice chairman of Dong A Bank), and 22 other defendants on four charges.

Vu Nhom has been prosecuted for the charge of “abuse of powers or position for appropriation of property” (Article 355 of the 2015 Criminal Code). He forged documents claiming to have paid VND200 billion ($8.8 million) to acquire DAB shares. This damage drew VND3.2 billion ($0.14 million) of interest since then. The investigation agency suggests that he should be made to take responsibility for these amounts and return $13.4 million to Tran Phuong Binh.

In addition to these 24 defendants, the investigation agency has issued an arrest warrant for Nguyen Huynh Dang (former head of DAB’s Business Department), who has yet to be found.

Dong A Bank was established in 1992 with VND5 trillion ($220 million) in charter capital. Tran Phuong Binh and his family members hold 10.24 per cent, and Phu Nhuan Jewelry JSC (PNJ) chaired by Binh’s wife holds another 7.7 per cent in the company.

In 2015, the State Bank of Vietnam (SBV) issued the decision on taking Dong A Bank under special supervision after discovering violations. SBV detected that the treasury of DAB’s headquarters was missing VND2.1 trillion ($92.5 million) and more than 62,000 taels of gold.

In 2016, MoPS’ investigation agency prosecuted and arrested Tran Phuong Binh and Nguyen Thi Ngoc Van (former deputy general director of DAB) for the charges of “deliberately acting against state regulations on economic management, causing serious consequences” and “breaching regulations on loan provision in the operations of credit institutions” (Article 179 of the 1999 Penal Code).

Tran Phuong Binh was prosecuted for the additional charge of “abuse of trust to appropriate property.” He directed the spending of VND1.16 trillion ($51.1 million) to acquire 74.2 million DAB shares, VND500 billion to be exchanged into $13.9 million, and ordered Vu Nhom to buy DAB shares, and took VND349.6 billion ($15.4 million) for himself. He appropriated over VND2 trillion ($88 million) from DAB.

Regarding the charge of “deliberately acting against state regulations,” Binh caused an additional damage of VND1.56 trillion ($69 million) to pay under-the-table interest, loans, gold, and foreign currency transactions.

Moreover, while Dong A Bank was in the red in 2013, Binh proposed to rise 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 with the total value of VND600 billion ($26.4 million).

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

Due to the unsuccessful raising of charter capital, in April 2014, Binh directed the bank to return the VND600 billion ($26.4 million) to Vu Nhom. Vu said 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 the VND3.2 billion ($0.14 million) of interest).