Court requests further investigation into Construction Bank case

HCM City (VNA) – The Ho Chi Minh City People’s Court on February 7 decided to return the dossier of the case “deliberately violating State regulations on economic management causing severe consequences” at the Vietnam Construction Bank (VNCB, now Construction Bank – CB), and requested further investigation.

According to the jury, during the over-one-month trial, defendant Tram Be, former Vice Chairman of the Saigon Thuong Tin Commercial Joint Stock Bank (Sacombank), affirmed that he had met and discussed with defendant Pham Cong Danh, former VNCB Chairman and former Chairman of the Member Council and General Director of Thien Thanh Group, and ordered Phan Huy Khang, former General Director of Sacombank, to make procedures for lending money to Danh.

Tram Be said he had not known the real purpose of Danh’s borrowing and had not acted for his own interest. He added that he was charged with intentionally violating State regulations is inappropriate and that only he and Danh were brought to trial was unfair.

Meanwhile, defendants who are former employees of the Bank for Investment and Development of Vietnam (BIDV) and the Tien Phong Bank (TPBank) affirmed that they had not been acquainted with Danh and had not known that the borrowing companies were related to Danh. The defendant admitted they had only known that these companies were guaranteed by VNCB, and they had not gained personal benefits.

The jury requested further investigation to clarify whether the acts of these defendants were mistakes in their banking operations or intentional violations as they were prosecuted for.

During the trial, empowered by the Supreme People’s Procuracy, the HCM City People’s Procuracy proposed revoking 6,126 billion VND (nearly 270 million USD) from BIDV, TPBank and Sacombank to return it to VNCB as the money was evidence of the case. However, representatives of the three banks opposed this proposal. The Vietnam Banks Association also suggested that the sum should not taken back to avoid affecting the banking system.

The jury requested that if the money was evidence of the case, it is a must to clarify the money was evidence of which intentional violation and this violation infringed which state regulation on economic management, so that there is basis for money recovery.

Another issue needed to be clarified is whether or not the 4,500 billion VND that Danh borrowed from BIDV and TPBank to raise VNCB’s chartered capital but was rejected by the State Bank of Vietnam (SBV) was part of the total loss of 6,126 billion VND. The SBV confirmed that the 4,500 billion VND had been transferred to VNCB.

The jury said this sum had been transferred by Pham Cong Danh and used by VNCB. Therefore, it is necessary to make clear if VNCB lost 6,126 billion VND or suffered from another level of loss.

Regarding Danh’s charge of “deliberately violating State regulations on economic management causing severe consequences”, during the trial, there is an opinion that Danh’s acts showed signs of swindling to appropriate assets.

The jury said it is necessary to clarify whether Danh used the borrowed money to pay for previous loans, use for personal purposes, increase VNCB’s chartered capital, or pay salary for his employees.

This was the second phase of the case in which Pham Cong Danh and his accomplices caused losses worth trillions of VND to VNCB (the first phase involved 9 trillion VND).

According to the indictment, in 2013 and 2014, Pham Cong Danh needed money but was unable to directly borrow from VNCB. He ordered executives and staff of VNCB and the Thien Thanh Group to compile false documents in the names of 29 companies which were established in Danh’s name or others, in order to take loans from Sacombank, TPBank and BIDV. 

Danh used the borrowed money for personal purposes and failed to pay off the debts.

He and his accomplices also used VNCB’s money to deposit at Sacombank, TPBank and BIDV as guarantees for his companies’ loans. The banks later kept the money as payment for the loans. Danh and his accomplices’ acts caused losses of 6,126 billion VND to VNCB.-VNA