Indictment against former Construction Bank executive announced

HCM City (VNA) – The Procuracy of Ho Chi Minh City on January 9 announced an indictment against Pham Cong Danh, ex-Chairman of the Vietnam Construction Bank (VNCB) Board of Directors, and his accomplices who were charged with “deliberately violating State regulations on economic management causing severe consequences” at VNCB.

This is the second day of the second-phase trial of the case.

According to the indictment, in 2013 and 2014, Pham Cong Danh, who is also ex-Chairman of the member council of Thien Thanh Group, needed money but was unable to directly borrow from VNCB. He ordered executives and staff of VNCB and 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 Saigon Thuong Tin Commercial Joint Stock Bank (Sacombank), Tien Phong (TPBank) and Bank for Investment and Development of Vietnam (BIDV). 

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

To guarantee these loans, Danh directed the falsification of a dossier to borrow 6.63 trillion VND (291 million USD) from VNCB and sent the money to the three abovementioned banks, which later collected debts of his companies from this sum of money.

He also directed granting guarantees of his companies to borrow money without collateral. He also organised the issuance, announcement and sale of bonds of Thien Thanh Group and the Trung Dung single-member limited liability company when these firms hadn’t had audited financial reports and written approval from competent agencies.

Danh also ordered the use of VNCB’s deposits to guarantee his companies’ loans from banks. However, debts of the guaranteed companies weren’t recorded and the firms weren’t asked to repay the deposits within the days. VNCB had to withdraw deposits ahead of schedule to pay off debts on behalf of Danh’s companies.

Those violations committed by Danh and his accessories caused losses of more than 6.1 trillion VND (267.8 million USD) to VNCB, leading to particularly serious consequences. Including the case’s first phase, Pham Cong Danh and his accomplices caused total losses of more than 15 trillion VND (658.5 million USD) to VNCB, according to the indictment.

Tram Be, former Vice Chairman of Sacombank, was also prosecuted in the second phase of the case. He was charged with discussing and agreeing with Phan Huy Khang, former Director General of Sacombank, to lend 1.8 trillion VND (79 million USD) to Pham Cong Danh through Danh’s companies.

Pham Cong Danh, Tram Be and Phan Huy Khang discussed and agreed on the sum of loans under the condition that collateral be real estate or deposit money.

On April 19, 2013, Pham Cong Danh, Phan Thanh Mai (former Director General of VNCB), Mai Huu Khuong (former member of VNCB Board of Directors), and Nguyen Quoc Vien (former head of VNCB’s control board) met Phan Huy Khang. Khang assigned Phan Dinh Tue, former Deputy Director General of Sacombank, to process the loan. Lending dossiers were falsified and the borrowing companies did not have business activities or were examined after they were lent.

On April 25, 2013, Tram Be signed off proposals submitted by the Sacombank branches of Hung Dao and District 8. The next day, money began to be disbursed for six companies of Danh. Danh used to money to pay off his companies’ debts and transferred the remaining 166 billion VND (7.29 million USD) to his personal account.

On April 26, 2014, when the loan term expired, since the six companies failed to pay off debts, Sacombank collected the original debt and loan interest from VNCB’s deposit at Sacombank. As a result, VNCB suffered losses of over 1.8 trillion VND (79 million USD).

The court is scheduled to question defendants on January 10.-VNA