Appeal trial held for 12 defendants of TISCO-related case hinh anh 1Nguyen Trong Khoi, former Deputy General Director of the Vietnam Steel Corporation at the court. (Photo: VNA)
Hanoi (VNA) – The High People’s Court in Hanoi on November 9 opened a trial for 12 defendants who filed appeals in a case related to wrongdoings at Thai Nguyen Iron and Steel JSC (TISCO).

The defendants included Tran Trong Mung, former General Director of TISCO; Dau Van Hung, former General Director of Vietnam Steel Corporation (VNS); Do Xuan Hoa, former chief accountant of TISCO; Nguyen Trong Khoi, former Deputy General Director of VNS; Nguyen Chi Dung, Hoang Ngoc Diep and Doan Thu Trang who are all former members of the Board of Directors of TISCO.

They were charged with “violating regulations on the management and use of State assets, causing losses and wastefulness” and “lacking sense of responsibility, causing serious consequences”.

Their appeals mostly focused on asking for a reduction of punishments and exemption of criminal responsibilities.

The court is scheduled to take place in four days. Dau Van Hung, former General Director of VNS asked for absence due to poor health conditions.

Earlier at the first-instance trial held in April 2021, the People’s Court of Hanoi sentenced Tran Trong Mung, former Director General of TISCO, to nine years and six months in prison for “violating regulations on management and use of State assets causing losses and wastefulness” under Clause 3, Article 219 of the 2015 Penal Code.

Meanwhile, five defendants were imprisoned for 18 months to two years and two given suspended sentences of 18 months each on the charge of lacking responsibility causing serious consequences.

Thirteen other defendants were given jail terms ranging from two to eight years and six months on the same charge.

The defendants were also ordered to pay compensation worth over 830 billion VND (36 million USD) in total to TISCO.

According to the indictment issued by the Supreme People’s Procuracy, the VNS Board of Directors decided to invest in the second phase of TISCO’s production expansion project which initially had total investment of more than 3.8 trillion VND (164.9 million USD at the current exchange rate). The China Metallurgical Group Corporation (MCC) won the construction bid in 2007.

On July 12, 2007, then TISCO General Director Tran Trong Mung and MCC General Director Shen Heting signed an engineering, procurement, and construction (EPC) contract worth over 160 million USD (equivalent to over 3.5 trillion VND). It was stipulated that the value, including taxes and expenses necessary for contract implementation, was to not change during the implementation process.

TISCO and MCC launched implementation on September 29, 2007. However, more than 11 months after the contract took effect, MCC had failed to select or sign contracts with subcontractors, or carry out the EPC contract. Instead, it proposed extending the contract implementation duration and raising the contract value by more than 138 million USD.

The indictment said that although individuals at TISCO and VNS were aware that MCC had infringed the contract and groundlessly proposed the implementation extension and value hike, they did not consider contract termination, revocation of the advance, or reporting the matter to competent persons to abolish the bidding result and re-organise the bidding process so as to ensure the project’s effectiveness and progress.

Among the defendants, Mung held the overall responsibility for the project’s effectiveness while Tinh was in charge of approving and directing project implementation.

The Supreme People’s Procuracy held that the violations of rules on the management of State assets and the lack of a sense of responsibility by those at TISCO and VNS caused losses of over 830 billion VND to the State. The sum is the interest rate TISCO had to pay to banks for the period from the time the project began falling behind schedule, on May 31, 2011, to the date an official investigation was launched, on April 18, 2019.

The defendants’ criminal acts not only adversely affected economic development and had a direct negative impact on production and business activities and the interests of employees at TISCO, they also indirectly affected the process of promoting rapid and sustainable economic development, becoming a burden on the national economy and causing a loss of trust in society./.