Court proposes investigating violations of industry ministry in steel firm’s project

At the court (Photo: VNA) 

Hanoi (VNA) – The Hanoi People’s Court on April 20 recommended investigating possible violations of the Ministry of Industry and Trade (MoIT) and considering the launch of criminal proceedings against several officials of the ministry involved in a case related to wrongdoings at Thai Nguyen Iron and Steel JSC (TISCO) (if sufficient ground is found).

Specifically, the trial panel said the MoIT made some decisions against the law, introduced and chose incapable units to carry out section C of the engineering, procurement and construction contract No. 01, which was one of the main factors leading to the consequences of the case.

The panel also proposed clarifying the violations of the Vietnam Industrial Construction Corporation (VINAINCON) in the implementation of the section C.

Tran Trong Mung, former Director General of TISCO, was sentenced 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.

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

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. 

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./.