Phạm Công Danh (blue shirt), ex-chairman of the Việt Nam Construction Bank (VNCB), on February 7 trial. — VNA/VNS Photo

HCM CITY — The HCM City People’s Court yesterday decided to 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. 

Phạm Công Danh, ex-chairman of the Việt Nam Construction Bank (VNCB) board of directors, for further investigation, is charged with “deliberately violating State regulations on economic management causing severe consequences” at the VNCB.

According to the judicial council, Trầm Bê, Sacombank’s ex-deputy chairman of the board of directors, confirmed that he had met Phạm Công Danh and instructed Phan Huy Khang, ex-general director of Sacombank, to complete procedures for Danh’s companies to borrow VNĐ1.8 trillion ($81 million). 

Bê said that he did not know why the money was borrowed, and that he had not earned any profit. He said that he should not be charged for “deliberately violating State regulations on economic management”.

Similarly, all other defendants, including the former staff of BIDV and TPBank, said they did not know Phạm Công Danh, and did not know that the related companies belonged to Danh, but only knew that all companies were guaranteed by VNCB. They said they did not receive any profit from the transactions.

The judicial council said that it would require more investigation to clarify whether defendants made professional mistakes or intended to violate laws as alleged.

During the trial, a representative of the People’s Supreme Procuracy asked the court to recoup the loss of VNĐ6.1 trillion (US$274 million) for VNCB from three banks, including BIDV, TPBank and Sacombank.

However, all three banks strongly protested the suggestion and the Việt Nam Banking Association also complained that if it had to recoup the money, the banking system would suffer a big impact.

The judicial council also asked to clarify if the sum of money was proof of malfeasance and precisely which violation had occurred. They said they needed to know exactly what was wrong in order to ask that the money be given back.

The judicial council must consider whether the money of VNĐ4.5 trillion (US$202 million) borrowed by Phạm Công Danh from BIDV and TPBank to increase registered capital for VNCB, which had not been approved by the State Bank of Việt Nam, might or might not be included in the total loss of VNĐ6.1 trillion ($274 million) of the case.

The State Bank of Việt Nam confirmed that the sum of VNĐ4.5 trillion (US$202 million) had been transferred to VNCB and recorded in its system.

The judicial council revealed that the sum of money had been transferred to VNCB by Phạm Công Danh and VNCB had used it. Therefore, the loss of VNCB would be VNĐ6.1 trillion ($274 million) or lower.

The council also asked whether or not the Prime Minister and the State Bank of Việt Nam have opinions about the issue.

Phạm Công Danh, ex-chairman of the Việt Nam Construction Bank (VNCB) board of directors, was prosecuted for “deliberately violating State regulations on economic management causing severe consequences”, and his behavior showed fraudulent appropriation of property, the court said.

The judicial council would like to make clear all money that Danh spent to pay for previous debts, for personal use, and for increasing registered capital at VNCB or for paying salaries for staff.

This is the second stage of the trial against Danh, who is serving 30 years in jail for wrongdoings at VNCB that resulted in losses of more than VNĐ9 trillion (US$405 million).

According to the indictment issued by the Supreme People’s Procuracy, in 2013 and 2014, the 51-year-old ex-chairman of the VNCB members’ board and ex-general director of the Thiên Thanh Group, instructed his staff to use 29 companies which had been set up by Danh to take out loans totalling more than VNĐ6.1 trillion ($274 million) at TPBank, Sacombank and BIDV.

The borrowed money was for Danh’s personal use, and he did not repay it.

To guarantee the sum of money, Danh and other defendants used VNCB’s money to deposit in the three banks. VNCB had to pay all of the debt of Danh’s companies to these banks. — VNS