Vietnam: Former bank chairman jailed for 30 years over $401m loss

A VIETNAMESE court has sentenced the ex-chairman of a state-owned bank to 30 years in jail for illegally withdrawing over US$401 million (VND9 trillion) from the state budget, state newspapers have reported.

Pham Cong Danh, former chairman of Vietinbank (Vietnam Construction Joint Stock Commercial Bank), was found guilty by the Ho Chih Minh City People’s Court for “violating lending regulations of credit institutions” and “deliberate act against state regulations on economic management, causing serious consequences”.

Danh, 51, was tried and sentenced along with 35 other defendants, many of whom were reportedly former executives at the bank.

According to Tuoi Tre News, former Vietinbank CEO Phan Thanh Mai was sentenced to 22 years in jail, followed by the director of Vietinbank’s branch in Saigon (20 years) and his deputy (19 years).

The other defendants, who were labelled accomplices to the crimes, were handed sentences ranging from three to nine years each.

Danh and his staff were accused of drawing up false lending documents to withdraw funds secretly from clients’ saving accounts and using the money for loans or depositing it into their personal accounts, according to an AFP report, published by the Business Standard.

The US$401 million loss was described as “the greatest loss for the Vietnamese Banking sector to date” by Tuoi Tre News.

An ex-official of Vietinbank, Huynh Thi Huyen Nhu, was sentenced to life imprisonment for embezzling over US$188 million (VND4 trillion) in 2014. The bank was bought over in late 2015 by the State Bank of Vietnam, and entrusted to Vietcombank – Vietnam’s biggest listed bank – for restructuring.

Vietnam’s banking sector is riddled with controversy, fueled by high-profile arrests of businessmen, executives, and officials, all of whom were allegedly involved in corruption, embezzlement, or incompetence scandals.